CALHOUN, Ga., July 25, 2018 /CNW/ -- Mohawk Industries,
Inc. (NYSE: MHK) today announced 2018 second quarter net earnings
of $197 million and diluted earnings
per share (EPS) of $2.62. Adjusted
net earnings were $263 million and
EPS was $3.51, excluding
restructuring, acquisition and other charges, a 6% decrease from
last year. Net sales for the second quarter of 2018 were
$2.6 billion, up 5% in the quarter
and 3% on a constant currency basis. For the second quarter of
2017, net sales were $2.5 billion,
net earnings were $261 million and
EPS was $3.48; adjusted net earnings
were $278 million and EPS was
$3.72, excluding restructuring,
acquisition and other charges.
For the six months ending June 30,
2018, net earnings and EPS were $405
million and $5.41,
respectively. Net earnings excluding restructuring, acquisition and
other charges were $488 million and
EPS was $6.52, an increase over the
2017 six-month period adjusted EPS. For the 2018 six-month period,
net sales were $5.0 billion, an
increase of 7% versus prior year as reported or 3% on a constant
currency and legacy basis. For the six-month period ending
July 1, 2017, net sales were
$4.7 billion, net earnings were
$461 million and EPS was $6.17; excluding restructuring, acquisition and
other charges, net earnings and EPS were $482 million and $6.44.
Commenting on Mohawk Industries' second quarter performance,
Jeffrey S. Lorberbaum, Chairman and
CEO, stated, "Our results fell short of our expectations, and we
are taking actions to improve the performance of our U.S.
businesses. With the overall economy, our results were negatively
impacted by input inflation, higher transportation costs, a
stronger dollar and a tight labor market. We were also affected by
changing product mix, timing of price increases, lower production
units, start-up of new projects and the delayed Godfrey Hirst
closing. To address these, we are raising prices, expanding in
growing channels and participating in new products and geographies.
In the U.S. market, we are increasing our LVT production and
sourcing, as LVT continues gaining market share.
"Our businesses outside North
America showed significant improvement and our results
improved more without start-up costs and expired patents. Although
the economy in Europe slowed
somewhat, the results in most of our non-U.S. businesses improved
substantially with LVT, Russian ceramic, wood panels and insulation
leading the growth. As the dollar strengthened during the period,
the Euro fell from $1.24 to
$1.16, reducing our translated
results in U.S. dollars.
"Our company and industry are absorbing significant inflation.
This year, we have had two carpet price increases and recently
followed those with a third increase to offset additional material
and freight inflation. We are taking pricing actions in most
product categories impacted by inflation, including our higher
value ceramic products.
"During the quarter, our new expansion projects had start-up
expenses of $15 million as we
continued investing to broaden our product offering and geographic
penetration. These investments will enhance our sales and
profitability, with most of the impact occurring in 2019 and
beyond.
"For the quarter, our Global Ceramic Segment sales increased 3%
as reported and 2% on a constant currency basis. Operating margin
was approximately 15% both as reported and on an adjusted basis,
declining year over year due to inflation, product mix and start-up
costs. During the period, our North American ceramic volume
improved with our average price weakening from growth in lower
value products and channels. To increase our share of the ceramic
market, we are delivering innovative products, enhancing our
service and increasing our participation in the home center,
builder and commercial channels. Our U.S. countertop growth is
accelerating, and construction on our quartz countertop plant in
Tennessee is on schedule, with
production slated to begin by the end of this year. In Mexico, our sales increased as the quarter
progressed, outpacing the market. We have doubled production at our
Salamanca plant and introduced
larger sizes to the market. European ceramic sales slowed slightly
with the economy, while margins increased from improved price and
mix and higher productivity. As we expand our Polish factory, we
are preparing to realign manufacturing among our European plants to
optimize our assets and improve our offering. Our Russian ceramic
sales and margins remain strong, and we are expanding our porcelain
floor and wall tile capacity.
"During the quarter, our Flooring North America Segment's sales
increased 2%. The segment's operating margin was 9.5% as reported
and 10% on an adjusted basis, absorbing inflation, lower than
expected production and start-up costs. The realization of our
price increases was later and our product mix declined more than we
anticipated. As our raw materials and freight costs continue to
escalate, we announced another price increase to recover. Our LVT
sales in the period grew less than we forecast due to a delay in
shipments of our sourced products. We anticipate a significant
increase in LVT sales as our new U.S. production ramps up and the
supply of sourced products increases in the third period. Our
residential carpet improved led by the builder, multi-family and
Main Street channels. Our new introductions in SmartStrand Silk
Reserve, Air.O unified soft flooring and our luxury Karastan
collections gained momentum in the market. Our new RevWood
collections with water proof technology are growing rapidly in the
retail and builder channels as an alternative to hardwood. Our
commercial hard surface collections showed stronger growth, and our
commercial carpet bookings strengthened as we progressed through
the period.
"For the quarter, our Flooring Rest of the World Segment's sales
increased 16% as reported and 8% on a constant currency basis. The
segment's operating income increased 16% as reported, with an
adjusted operating margin of 17%, as a result of improved price,
product mix and productivity, offsetting inflation, start-up costs
and expired patents. Our LVT sales were up dramatically and will
increase more with our manufacturing expansion. Until now, we have
been producing flexible LVT, and we have completed the initial
production on rigid LVT, which will be launching in the third
quarter. Our new premium laminate products utilizing unique
technologies and water resistance are taking share and improving
our mix. In Russia, we are
introducing our latest European technology with our new laminate
plant expansion. We are using our European sheet vinyl to build
demand for our new Russian plant, which should start up by the end
of this year. Our new carpet tile plant in Belgium is ramping up to penetrate the
European commercial flooring market. Our wood panels and insulation
products grew significantly from our manufacturing investments,
better material supply and stronger market conditions. We completed
the Godfrey Hirst acquisition on July
2, a month later than we had anticipated, and we are
implementing strategies to become a total flooring provider in
Australia and New Zealand as we have in the U.S.
"We are taking a comprehensive approach to improve our
performance and profitability in the U.S. Our initiatives to
improve pricing, increase sales in growing channels and reduce cost
will benefit the remainder of the year. Given the impact of
inflation, timing of price increases and other challenges, we do
not anticipate that our actions in the U.S. will offset the
pressures we are facing before next year. We expect continued
strength in Europe and
Russia, where inflation and
shifting product preferences are less intense than in the U.S.
Around the globe, we are entering new products and geographies as
well as expanding constrained categories. Having closed Godfrey
Hirst, we are already enhancing the largest flooring provider in
Australia and New Zealand. In the U.S., we are investing in
growing categories such as LVT and quartz countertops. If the
recently announced Chinese tariffs are implemented, they will
enhance our U.S. market position and results. Taking all of this
into account, our EPS guidance for the third quarter is
$3.54 to $3.64, excluding any one-time charges.
"We are passing through inflation, optimizing our new expansions
and maximizing our LVT position to increase our profitability. Our
talented organization, innovative products and strong balance sheet
provide long-term advantages, and we continue to pursue
acquisitions that bolt on or add new dimensions to expand the value
of our company."
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, Feltex, Godfrey Hirst, 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; taxes and tax reform, product and other claims;
litigation; and other risks identified in Mohawk's SEC reports and
public announcements.
Conference call Thursday, July 26,
2018, 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 # 1166308. A replay will be
available until August 25, 2018, by
dialing 1-855-859-2056 for US/local calls and 1-404-537-3406 for
International/Local calls and entering Conference ID # 1166308.
MOHAWK INDUSTRIES,
INC. AND SUBSIDIARIES
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
Consolidated
Statement of Operations Data
|
|
Quarter
Ended
|
|
Six Months
Ended
|
(Amounts in
thousands, except per share data)
|
|
June 30,
2018
|
|
July 1,
2017
|
|
June 30,
2018
|
|
July 1,
2017
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
2,577,014
|
|
2,453,038
|
|
$
|
4,989,216
|
|
4,673,683
|
Cost of
sales
|
|
1,810,459
|
|
1,673,902
|
|
3,517,969
|
|
3,214,194
|
Gross profit
|
|
766,555
|
|
779,136
|
|
1,471,247
|
|
1,459,489
|
Selling, general and
administrative expenses
|
|
440,248
|
|
423,311
|
|
876,541
|
|
828,880
|
Operating
income
|
|
326,307
|
|
355,825
|
|
594,706
|
|
630,609
|
Interest
expense
|
|
7,863
|
|
8,393
|
|
15,391
|
|
16,595
|
Other expense
(income), net
|
|
2,090
|
|
3,002
|
|
6,088
|
|
170
|
Earnings before income taxes
|
|
316,354
|
|
344,430
|
|
573,227
|
|
613,844
|
Income tax
expense
|
|
118,809
|
|
82,682
|
|
166,441
|
|
151,040
|
Net
earnings including noncontrolling interest
|
|
197,545
|
|
261,748
|
|
406,786
|
|
462,804
|
Net income
attributable to noncontrolling interest
|
|
959
|
|
1,067
|
|
1,434
|
|
1,569
|
Net earnings
attributable to Mohawk Industries, Inc.
|
|
$
|
196,586
|
|
260,681
|
|
$
|
405,352
|
|
461,235
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share attributable to Mohawk Industries, Inc.
|
|
|
|
|
|
|
|
|
Basic earnings per
share attributable to Mohawk Industries, Inc.
|
|
$
|
2.64
|
|
3.51
|
|
$
|
5.44
|
|
6.21
|
Weighted-average
common shares outstanding - basic
|
|
74,597
|
|
74,327
|
|
74,525
|
|
74,269
|
|
|
|
|
|
|
|
|
|
Diluted earnings
per share attributable to Mohawk Industries, Inc.
|
|
|
|
|
|
|
|
|
Diluted earnings per
share attributable to Mohawk Industries, Inc.
|
|
$
|
2.62
|
|
3.48
|
|
$
|
5.41
|
|
6.17
|
Weighted-average
common shares outstanding - diluted
|
|
74,937
|
|
74,801
|
|
74,928
|
|
74,773
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Financial
Information
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
$
|
127,048
|
|
109,762
|
|
$
|
249,702
|
|
214,785
|
Capital
expenditures
|
|
$
|
247,418
|
|
224,153
|
|
$
|
498,354
|
|
425,423
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
Balance Sheet Data
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2018
|
|
July 1,
2017
|
ASSETS
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
|
$
|
518,226
|
|
130,238
|
Receivables, net
|
|
|
|
|
|
1,737,935
|
|
1,639,614
|
Inventories
|
|
|
|
|
|
2,061,204
|
|
1,865,941
|
Prepaid expenses and other current assets
|
|
|
|
|
|
456,315
|
|
374,930
|
Total
current assets
|
|
|
|
|
|
4,773,680
|
|
4,010,723
|
Property, plant and
equipment, net
|
|
|
|
|
|
4,421,073
|
|
3,892,251
|
Goodwill
|
|
|
|
|
|
2,447,046
|
|
2,417,058
|
Intangible assets,
net
|
|
|
|
|
|
858,532
|
|
878,301
|
Deferred income taxes
and other non-current assets
|
|
|
|
|
|
393,708
|
|
391,158
|
Total assets
|
|
|
|
|
|
$
|
12,894,039
|
|
11,589,491
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Current portion of
long-term debt and commercial paper
|
|
|
|
|
|
$
|
1,146,511
|
|
1,754,077
|
Accounts payable and
accrued expenses
|
|
|
|
|
|
1,589,561
|
|
1,466,658
|
Total
current liabilities
|
|
|
|
|
|
2,736,072
|
|
3,220,735
|
Long-term debt, less
current portion
|
|
|
|
|
|
1,884,023
|
|
1,174,440
|
Deferred income taxes
and other long-term liabilities
|
|
|
|
|
|
870,467
|
|
713,110
|
Total
liabilities
|
|
|
|
|
|
5,490,562
|
|
5,108,285
|
Redeemable
noncontrolling interest
|
|
|
|
|
|
30,043
|
|
26,713
|
Total stockholders'
equity
|
|
|
|
|
|
7,373,434
|
|
6,454,493
|
Total liabilities and stockholders' equity
|
|
|
|
|
|
$
|
12,894,039
|
|
11,589,491
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
Information
|
|
Quarter
Ended
|
|
As of or for the Six
Months Ended
|
(Amounts in
thousands)
|
|
June 30,
2018
|
|
July 1,
2017
|
|
June 30,
2018
|
|
July 1,
2017
|
|
|
|
|
|
|
|
|
|
Net sales:
|
|
|
|
|
|
|
|
|
Global Ceramic
|
|
$
|
929,297
|
|
902,670
|
|
$
|
1,805,845
|
|
1,687,639
|
Flooring NA
|
|
1,057,570
|
|
1,040,299
|
|
2,007,928
|
|
1,979,795
|
Flooring ROW
|
|
590,147
|
|
510,069
|
|
1,175,443
|
|
1,006,249
|
Intersegment sales
|
|
-
|
|
-
|
|
-
|
|
-
|
Consolidated net sales
|
|
$
|
2,577,014
|
|
2,453,038
|
|
$
|
4,989,216
|
|
4,673,683
|
|
|
|
|
|
|
|
|
|
Operating income
(loss):
|
|
|
|
|
|
|
|
|
Global Ceramic
|
|
$
|
134,760
|
|
152,557
|
|
$
|
248,177
|
|
268,593
|
Flooring NA
|
|
100,662
|
|
127,482
|
|
175,410
|
|
219,624
|
Flooring ROW
|
|
100,166
|
|
86,052
|
|
189,226
|
|
162,147
|
Corporate and intersegment eliminations
|
|
(9,281)
|
|
(10,266)
|
|
(18,107)
|
|
(19,755)
|
Consolidated operating income
|
|
$
|
326,307
|
|
355,825
|
|
$
|
594,706
|
|
630,609
|
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
Global Ceramic
|
|
|
|
|
|
$
|
4,974,791
|
|
4,736,068
|
Flooring NA
|
|
|
|
|
|
3,927,190
|
|
3,625,350
|
Flooring ROW
|
|
|
|
|
|
3,701,419
|
|
2,984,716
|
Corporate and intersegment eliminations
|
|
|
|
|
|
290,639
|
|
243,357
|
Consolidated assets
|
|
|
|
|
|
$
|
12,894,039
|
|
11,589,491
|
|
|
|
|
|
|
|
|
|
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
Six Months
Ended
|
|
|
|
|
|
|
June 30,
2018
|
|
July 1,
2017
|
|
June 30,
2018
|
|
July 1,
2017
|
Net earnings
attributable to Mohawk Industries, Inc.
|
|
|
|
$
|
196,586
|
|
260,681
|
|
405,352
|
|
461,235
|
Adjusting
items:
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related and other costs
|
|
|
|
16,042
|
|
15,878
|
|
38,146
|
|
19,856
|
Acquisitions purchase
accounting , including inventory step-up
|
|
|
|
194
|
|
9,571
|
|
1,548
|
|
9,763
|
Release of
indemnification asset
|
|
|
|
|
-
|
|
-
|
|
1,749
|
|
-
|
Income taxes -
reversal of uncertain tax position
|
|
|
|
-
|
|
-
|
|
(1,749)
|
|
-
|
Income
taxes
|
|
|
|
|
|
50,106
|
|
(7,677)
|
|
43,166
|
|
(9,091)
|
Adjusted net earnings
attributable to Mohawk Industries, Inc.
|
|
|
|
$
|
262,928
|
|
278,453
|
|
488,212
|
|
481,763
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted diluted
earnings per share attributable to Mohawk Industries,
Inc.
|
|
|
|
$
|
3.51
|
|
3.72
|
|
6.52
|
|
6.44
|
Weighted-average
common shares outstanding - diluted
|
|
|
|
|
74,937
|
|
74,801
|
|
74,928
|
|
74,773
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Total Debt to Net Debt
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
June 30,
2018
|
Current portion of
long-term debt and commercial paper
|
|
$
|
1,146,511
|
Long-term debt, less
current portion
|
|
|
1,884,023
|
Less: Cash and cash
equivalents
|
|
|
518,226
|
Net Debt
|
|
|
|
$
|
2,512,308
|
Reconciliation of
Operating Income to Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Trailing
Twelve
|
|
|
|
|
Quarters
Ended
|
|
Months
Ended
|
|
|
|
|
September 30,
2017
|
|
December 31,
2017
|
|
March 31,
2018
|
|
June 30,
2018
|
|
June 30,
2018
|
Operating
income
|
|
|
|
380,098
|
|
343,466
|
|
268,399
|
|
326,307
|
|
1,318,270
|
Other (expense)
income
|
|
|
|
(1,285)
|
|
(3,750)
|
|
(3,998)
|
|
(2,090)
|
|
(11,123)
|
Net (income) loss
attributable to noncontrolling interest
|
|
(997)
|
|
(488)
|
|
(475)
|
|
(959)
|
|
(2,919)
|
Depreciation and
amortization
|
|
|
113,515
|
|
118,372
|
|
122,654
|
|
127,048
|
|
481,589
|
EBITDA
|
|
|
|
491,331
|
|
457,600
|
|
386,580
|
|
450,306
|
|
1,785,817
|
Restructuring,
acquisition and integration-related and other costs
|
|
13,853
|
|
15,231
|
|
22,104
|
|
16,042
|
|
67,230
|
Acquisitions purchase
accounting, including inventory step-up
|
|
3,551
|
|
-
|
|
1,354
|
|
194
|
|
5,099
|
Release of
indemnification asset
|
|
|
-
|
|
4,459
|
|
1,749
|
|
-
|
|
6,208
|
Adjusted
EBITDA
|
|
|
|
508,735
|
|
477,290
|
|
411,787
|
|
466,542
|
|
1,864,354
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Debt to Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
1.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net Sales to Net Sales on a Constant Exchange Rate Excluding
Acquisition Volume
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
Six Months
Ended
|
|
|
|
|
June 30,
2018
|
|
July 1,
2017
|
|
June 30,
2018
|
|
July 1,
2017
|
Net sales
|
|
|
|
$
|
2,577,014
|
|
2,453,038
|
|
4,989,216
|
|
4,673,683
|
Adjustment to net
sales on a constant exchange rate
|
|
(48,326)
|
|
-
|
|
(147,158)
|
|
-
|
Net sales on a
constant exchange rate
|
|
|
2,528,688
|
|
2,453,038
|
|
4,842,058
|
|
4,673,683
|
Less: impact of
acquisition volume
|
|
|
(1,239)
|
|
-
|
|
(46,515)
|
|
-
|
Net sales on a
constant exchange rate excluding acquisition volume
|
|
$
|
2,527,449
|
|
2,453,038
|
|
4,795,543
|
|
4,673,683
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment Net Sales to Segment Net Sales on a Constant Exchange Rate
Excluding Acquisition Volume
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
Global
Ceramic
|
|
|
|
June 30,
2018
|
|
July 1,
2017
|
Net sales
|
|
|
|
$
|
929,297
|
|
902,670
|
Adjustment to segment
net sales on a constant exchange rate
|
|
(10,986)
|
|
-
|
Segment net sales on
a constant exchange rate
|
|
918,311
|
|
902,670
|
Less: impact of
acquisition volume
|
|
|
(1,239)
|
|
-
|
Segment net sales on
a constant exchange rate excluding acquisition volume
|
|
$
|
917,072
|
|
902,670
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment Net Sales to Segment Net Sales on a Constant Exchange
Rate
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
Flooring
ROW
|
|
|
|
June 30,
2018
|
|
July 1,
2017
|
Net sales
|
|
|
|
$
|
590,147
|
|
510,069
|
Adjustment to segment
net sales on a constant exchange rate
|
|
(37,340)
|
|
-
|
Segment net sales on
a constant exchange rate
|
|
$
|
552,807
|
|
510,069
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Gross Profit to Adjusted Gross Profit
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
|
|
|
June 30,
2018
|
|
July 1,
2017
|
Gross
Profit
|
|
|
|
$
|
766,555
|
|
779,136
|
Adjustments to gross
profit:
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related and other costs
|
|
12,018
|
|
13,028
|
Acquisitions purchase
accounting, including inventory step-up
|
|
194
|
|
9,571
|
Adjusted gross
profit
|
|
|
|
$
|
778,767
|
|
801,735
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Selling, General and Administrative Expenses to Adjusted Selling,
General and Administrative Expenses
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
|
|
|
June 30,
2018
|
|
July 1,
2017
|
Selling, general and
administrative expenses
|
|
|
$
|
440,248
|
|
423,311
|
Adjustments to
selling, general and administrative expenses:
|
|
|
|
|
Restructuring,
acquisition and integration-related and other costs
|
|
(4,024)
|
|
(2,850)
|
Adjusted
selling, general and administrative expenses
|
|
$
|
436,224
|
|
420,461
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Operating Income to Adjusted Operating Income
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
|
|
|
June 30,
2018
|
|
July 1,
2017
|
Operating
income
|
|
|
|
$
|
326,307
|
|
355,825
|
Adjustments to
operating income:
|
|
|
|
|
|
Restructuring,
acquisition and integration-related and other costs
|
|
16,042
|
|
15,878
|
Acquisitions purchase
accounting, including inventory step-up
|
|
194
|
|
9,571
|
Adjusted operating
income
|
|
|
|
$
|
342,543
|
|
381,274
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment Operating Income to Adjusted Segment Operating
Income
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
Global
Ceramic
|
|
|
|
June 30,
2018
|
|
July 1,
2017
|
Operating
income
|
|
|
|
$
|
134,760
|
|
152,557
|
Adjustments to
segment operating income:
|
|
|
|
|
|
Restructuring,
acquisition and integration-related and other costs
|
|
5,408
|
|
1,305
|
Acquisitions purchase
accounting, including inventory step-up
|
|
-
|
|
9,571
|
Adjusted segment
operating income
|
|
|
$
|
140,168
|
|
163,433
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment Operating Income to Adjusted Segment Operating
Income
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
Flooring
NA
|
|
|
|
June 30,
2018
|
|
July 1,
2017
|
Operating
income
|
|
|
|
$
|
100,662
|
|
127,482
|
Adjustments to
segment operating income:
|
|
|
|
|
|
Restructuring,
acquisition and integration-related and other costs
|
|
8,881
|
|
12,196
|
Adjusted
segment operating income
|
|
|
$
|
109,543
|
|
139,678
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment Operating Income to Adjusted Segment Operating
Income
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
Flooring
ROW
|
|
|
|
June 30,
2018
|
|
July 1,
2017
|
Operating
income
|
|
|
|
$
|
100,166
|
|
86,052
|
Adjustments to
segment operating income:
|
|
|
|
|
|
Restructuring,
acquisition and integration-related and other costs
|
|
1,338
|
|
2,170
|
Acquisitions purchase
accounting, including inventory step-up
|
|
194
|
|
-
|
Adjusted segment
operating income
|
|
|
$
|
101,698
|
|
88,222
|
|
|
|
|
|
|
|
|
Reconciliation of
Earnings including Noncontrolling Interests Before Income Taxes to
Adjusted Earnings Including Noncontrolling Interests Before Income
Taxes
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
|
|
|
June 30,
2018
|
|
July 1,
2017
|
Earnings before
income taxes
|
|
|
|
$
|
316,354
|
|
344,430
|
Noncontrolling
interests
|
|
|
|
(959)
|
|
(1,067)
|
Adjustments to
earnings including noncontrolling interests before income
taxes:
|
|
|
|
|
Restructuring,
acquisition and integration-related & other costs
|
|
16,042
|
|
15,878
|
Acquisitions purchase
accounting, including inventory step-up
|
|
194
|
|
9,571
|
Adjusted
earnings including noncontrolling interests before income
taxes
|
|
$
|
331,631
|
|
368,812
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Income Tax Expense to Adjusted Income Tax
Expense
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
|
|
|
June 30,
2018
|
|
July 1,
2017
|
Income tax
expense
|
|
|
|
$
|
118,809
|
|
82,682
|
Income tax effect of
adjusting items
|
|
|
|
(50,106)
|
|
7,677
|
Adjusted
income tax expense
|
|
|
$
|
68,703
|
|
90,359
|
|
|
|
|
|
|
|
Adjusted income tax
rate
|
|
|
|
20.7%
|
|
24.5%
|
|
|
|
|
|
|
|
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 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,
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-q2-results-300686616.html
SOURCE Mohawk Industries, Inc.