Mohawk Industries, Inc. Announces Third Quarter Earnings
CALHOUN, Ga., Nov. 1, 2012 /PRNewswire/ -- Mohawk Industries,
Inc. (NYSE: MHK) today announced 2012 third quarter net earnings of
$70 million and diluted earnings per
share (EPS) of $1.01. Excluding
restructuring charges, net earnings were $72
million and EPS was $1.04, a
25% increase over last year's third quarter adjusted EPS. Net sales
for the third quarter of 2012 were $1.5
billion, an increase of 2% versus prior year and an increase
of 4% on a constant exchange rate. For the third quarter of 2011,
net sales were $1.4 billion, net
earnings were $47 million and EPS was
$0.68. Excluding unusual items, net
earnings for the third quarter of 2011 were $57 million and EPS was $0.83.
For the nine months ending September 29,
2012, net sales were $4.4
billion, an increase of 2% versus prior year and 4% on a
constant exchange rate. Net earnings and EPS for the nine-month
period were $184 million and
$2.66, respectively. Excluding
restructuring charges, net earnings were $191 million and EPS was $2.76, an increase of 25% over the nine-month
adjusted EPS results in 2011. For the nine months ending
October 1, 2011, net sales were
$4.3 billion, net earnings were
$131 million and EPS was $1.90. Excluding unusual items, net earnings and
EPS were $152 million and
$2.21, respectively.
Commenting on Mohawk Industries' third quarter performance,
Jeffrey S. Lorberbaum, Chairman and
CEO, stated, "All of our segments delivered solid third quarter
performances with improvements in product mix, pricing, volume and
productivity, as well as lower interest expense contributing to our
results. Across the enterprise, we have managed to keep SG&A
dollars in line with last year even as we invested significantly
more in new product innovations and marketing to improve our future
sales and product mix. During the quarter, we generated adjusted
EBITDA of $179 million and free cash
flow of $156 million. Both our net
debt to adjusted EBITDA ratio and net debt to capitalization ratio
improved to 1.7 and 22%, respectively. Mohawk's strong
financial position provides us with the flexibility to pursue
strategic opportunities such as the recently announced agreement to
acquire Pergo, the most recognized brand of premium laminate
flooring in the U.S. and Europe."
The Mohawk segment increased its adjusted operating income
margin 180 basis points with sales remaining flat compared to 2011.
The gains stemmed from improved pricing and product mix, reduced
manufacturing and distribution costs and increased productivity.
Our carpet sales performance was stronger in our specialty and
contractor channels but was offset by the timing of product
transitions in the home center channel. Our rug sales improved over
the prior period, though they still remained below last year as
retailers adjusted their strategies with consumer spending.
We saw continued improvement in mix and expanded our
SmartStrand® Silk™ collection, which has redefined the
premium carpet market. We enhanced productivity through improved
manufacturing and distribution efficiencies and gains from our
capital investments.
Dal-Tile sales grew 9% during the quarter or 10% on a constant
exchange rate. The segment improved sales in both residential and
commercial categories and continued significant growth in the
Mexican market. Operating margins were enhanced from actions that
improved productivity and increased yields. Sales grew across all
residential channels supported by our new Reveal Imaging designs,
fashionable mosaics and larger format tiles that are aligned with
today's decorating trends. We are leveraging Dal-Tile's traditional
strength in the builder channel across our business segments to
expand commitments with regional builders. We have introduced
specific value-engineered products to gain position in the growing
multi-family category. In Mexico,
our new Salamanca tile plant is
successfully ramping up and supplying product to satisfy our
growing ceramic position. Across the segment, we lowered
manufacturing costs through improved material formulations, higher
yields and lower waste.
Unilin segment sales during the quarter were flat as reported,
but grew 9% on a constant exchange rate. Outside North America, laminate and wood flooring
sales grew from continued expansion into the DIY channel, increases
in the Russian market and our Australian acquisition. Our Russian
laminate facility increased its production to satisfy higher demand
and implemented productivity improvements. In North America,
we grew our laminate and wood products through all customer
channels during the quarter. New product introductions, increased
home center penetration, gains within the builder channel and
promotional activity increased our sales. Declining new
construction in Benelux and France
created headwinds for our insulated roofing panels. To reduce costs
in this category, we are consolidating our brands and sales forces
as well as implementing process improvements. By helping meet
European energy goals, our insulation panels delivered strong sales
increases in both Belgium and
France.
Mohawk's third quarter results reflect our strengths in
delivering innovative products, driving operational excellence and
entering new geographic markets. We continue to invest
strategically by introducing differentiated products, lowering our
manufacturing and administrative costs and acquiring new companies
that will enhance our results. We have taken the necessary
steps to align our pricing with our raw material inflation and we
will react as required. In the U.S., increasing new home
construction and improved sales of existing homes provide a
positive outlook for future flooring growth. In Europe, soft market conditions due to economic
uncertainty and changes in exchange rates are anticipated to be a
headwind. Based on these factors, our guidance for fourth quarter
earnings is $.89 to $.98 per share,
excluding any restructuring costs.
Mohawk's strong financial position allowed us to enter into an
agreement to acquire Pergo which will benefit our worldwide
laminate business and we are well positioned to invest in other
opportunities as they arise. We continue to execute our
long-term strategy of product innovation, cost reduction, asset
maximization and geographic expansion. Each of our businesses is
well situated to benefit from the improvements in the U.S.
remodeling and construction category, which remains substantially
below peak levels. Our organization is focused on bringing value to
our customers while maximizing our results.
Mohawk is a leading supplier of flooring for both residential
and commercial applications. Mohawk provides a complete
selection for all markets of carpet, ceramic tile, laminate, wood,
stone, vinyl and rugs. These products are marketed under the
premier brands in the industry including Mohawk, Karastan, Lees,
Bigelow, Durkan, Mohawk Home, Daltile, American Olean, Unilin and
Quick-Step. Mohawk's unique merchandising and marketing
assists consumers in creating exquisite floors to fulfill their
dreams. Mohawk provides a premium level of service with its own
trucking fleet and local distribution in the U.S. Mohawk's
international presence includes operations in Australia, Brazil, China, Europe, Malaysia, Mexico and Russia.
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
in raw material prices and other input costs; 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 2,
2012 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 # 37587426. A replay will also be available
until November 16, 2012 by dialing
855-859-2056 for US/local calls and 404-537-3406 for
International/Local calls and entering Conference ID #
37587426.
MOHAWK
INDUSTRIES, INC. AND SUBSIDIARIES
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Statement of
Operations
|
|
Three
Months Ended
|
|
|
Nine
Months Ended
|
|
(Amounts in thousands, except per share
data)
|
|
September 29, 2012
|
|
October 1, 2011
|
|
September 29, 2012
|
|
October 1, 2011
|
|
|
|
|
|
|
|
|
|
Net
sales
|
|
$
|
1,473,493
|
|
|
1,442,512
|
|
|
4,352,321
|
|
|
4,263,961
|
|
Cost of
sales
|
|
1,100,656
|
|
|
1,084,889
|
|
|
3,231,594
|
|
|
3,182,499
|
|
Gross
profit
|
|
372,837
|
|
|
357,623
|
|
|
1,120,727
|
|
|
1,081,462
|
|
Selling,
general and administrative expenses
|
|
268,883
|
|
|
266,159
|
|
|
837,079
|
|
|
832,214
|
|
Operating
income
|
|
103,954
|
|
|
91,464
|
|
|
283,648
|
|
|
249,248
|
|
Interest
expense
|
|
17,969
|
|
|
25,132
|
|
|
59,311
|
|
|
77,487
|
|
Other
expense (income), net
|
|
322
|
|
|
13,413
|
|
|
(1,063)
|
|
|
13,794
|
|
Earnings
before income taxes
|
|
85,663
|
|
|
52,919
|
|
|
225,400
|
|
|
157,967
|
|
Income tax
expense
|
|
15,359
|
|
|
5,223
|
|
|
40,896
|
|
|
23,639
|
|
Net
earnings
|
|
70,304
|
|
|
47,696
|
|
|
184,504
|
|
|
134,328
|
|
Net
earnings attributable to noncontrolling interest
|
|
—
|
|
|
(1,050)
|
|
|
(635)
|
|
|
(3,337)
|
|
Net
earnings attributable to Mohawk Industries, Inc.
|
|
$
|
70,304
|
|
|
46,646
|
|
|
183,869
|
|
|
130,991
|
|
Basic
earnings per share attributable to Mohawk Industries,
Inc.
|
|
$
|
1.02
|
|
|
0.68
|
|
|
2.67
|
|
|
1.91
|
|
Weighted-average common shares outstanding -
basic
|
|
69,010
|
|
|
68,759
|
|
|
68,952
|
|
|
68,725
|
|
Diluted
earnings per share attributable to Mohawk Industries,
Inc.
|
|
$
|
1.01
|
|
|
0.68
|
|
|
2.66
|
|
|
1.90
|
|
Weighted-average common shares outstanding -
diluted
|
|
69,337
|
|
|
68,954
|
|
|
69,247
|
|
|
68,946
|
|
|
|
|
|
|
|
|
|
|
Other
Financial Information
|
|
|
|
|
|
|
|
|
(Amounts in thousands)
|
|
|
|
|
|
|
|
|
Net cash
provided by operating activities
|
|
$
|
202,971
|
|
|
109,598
|
|
|
298,547
|
|
|
138,188
|
|
Depreciation and amortization
|
|
$
|
71,298
|
|
|
74,207
|
|
|
216,415
|
|
|
222,804
|
|
Capital
expenditures
|
|
$
|
47,311
|
|
|
69,741
|
|
|
134,998
|
|
|
182,260
|
|
|
|
|
|
|
|
|
|
|
Consolidated Balance Sheet Data
|
|
|
|
|
|
|
|
|
(Amounts in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 29, 2012
|
|
October 1, 2011
|
ASSETS
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash and
cash equivalents
|
|
|
|
|
|
$
|
380,842
|
|
|
276,156
|
|
Receivables, net
|
|
|
|
|
|
817,214
|
|
|
775,421
|
|
Inventories
|
|
|
|
|
|
1,139,403
|
|
|
1,132,073
|
|
Prepaid
expenses and other current assets
|
|
|
|
|
|
146,275
|
|
|
125,007
|
|
Deferred
income taxes
|
|
|
|
|
|
112,995
|
|
|
131,931
|
|
Total
current assets
|
|
|
|
|
|
2,596,729
|
|
|
2,440,588
|
|
Property,
plant and equipment, net
|
|
|
|
|
|
1,657,226
|
|
|
1,696,182
|
|
Goodwill
|
|
|
|
|
|
1,371,494
|
|
|
1,389,430
|
|
Intangible
assets, net
|
|
|
|
|
|
554,257
|
|
|
634,164
|
|
Deferred
income taxes and other non-current assets
|
|
|
|
|
|
122,906
|
|
|
117,204
|
|
Total
assets
|
|
|
|
|
|
$
|
6,302,612
|
|
|
6,277,568
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Current
portion of long-term debt
|
|
|
|
|
|
$
|
57,673
|
|
|
438,300
|
|
Accounts
payable and accrued expenses
|
|
|
|
|
|
761,186
|
|
|
774,939
|
|
Total
current liabilities
|
|
|
|
|
|
818,859
|
|
|
1,213,239
|
|
Long-term
debt, less current portion
|
|
|
|
|
|
1,467,269
|
|
|
1,173,038
|
|
Deferred
income taxes and other long-term liabilities
|
|
|
|
|
|
421,549
|
|
|
439,798
|
|
Total
liabilities
|
|
|
|
|
|
2,707,677
|
|
|
2,826,075
|
|
Noncontrolling interest
|
|
|
|
|
|
—
|
|
|
32,758
|
|
Total
stockholders' equity
|
|
|
|
|
|
3,594,935
|
|
|
3,418,735
|
|
Total
liabilities and stockholders' equity
|
|
|
|
|
|
$
|
6,302,612
|
|
|
6,277,568
|
|
|
|
|
|
|
|
|
|
|
Segment
Information
|
|
Three
Months Ended
|
|
|
As of or
for the Nine Months Ended
|
|
(Amounts in thousands)
|
|
September 29, 2012
|
|
October 1, 2011
|
|
September 29, 2012
|
|
October 1, 2011
|
|
|
|
|
|
|
|
|
|
Net
sales:
|
|
|
|
|
|
|
|
|
Mohawk
|
|
$
|
751,787
|
|
|
754,470
|
|
|
2,186,160
|
|
|
2,203,699
|
|
Dal-Tile
|
|
417,533
|
|
|
381,891
|
|
|
1,214,746
|
|
|
1,105,775
|
|
Unilin
|
|
328,582
|
|
|
329,514
|
|
|
1,020,380
|
|
|
1,018,443
|
|
Intersegment sales
|
|
(24,409)
|
|
|
(23,363)
|
|
|
(68,965)
|
|
|
(63,956)
|
|
Consolidated net sales
|
|
$
|
1,473,493
|
|
|
1,442,512
|
|
|
4,352,321
|
|
|
4,263,961
|
|
|
|
|
|
|
|
|
|
|
Operating
income (loss):
|
|
|
|
|
|
|
|
|
Mohawk
|
|
$
|
43,810
|
|
|
30,946
|
|
|
106,228
|
|
|
79,187
|
|
Dal-Tile
|
|
37,452
|
|
|
33,073
|
|
|
99,912
|
|
|
82,911
|
|
Unilin
|
|
28,892
|
|
|
33,048
|
|
|
96,613
|
|
|
105,507
|
|
Corporate
and eliminations
|
|
(6,200)
|
|
|
(5,603)
|
|
|
(19,105)
|
|
|
(18,357)
|
|
Consolidated operating income
|
|
$
|
103,954
|
|
|
91,464
|
|
|
283,648
|
|
|
249,248
|
|
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
Mohawk
|
|
|
|
|
|
$
|
1,760,828
|
|
|
1,810,191
|
|
Dal-Tile
|
|
|
|
|
|
1,783,147
|
|
|
1,735,718
|
|
Unilin
|
|
|
|
|
|
2,586,084
|
|
|
2,569,103
|
|
Corporate
and eliminations
|
|
|
|
|
|
172,553
|
|
|
162,556
|
|
Consolidated assets
|
|
|
|
|
|
$
|
6,302,612
|
|
|
6,277,568
|
|
|
|
|
|
|
|
|
|
|
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 29,
2012
|
|
October 1,
2011
|
|
September 29,
2012
|
|
October 1,
2011
|
Net
earnings attributable to Mohawk Industries, Inc.
|
|
$
|
70,304
|
|
|
46,646
|
|
|
183,869
|
|
|
130,991
|
|
Adjusting
items:
|
|
|
|
|
|
|
|
|
Unrealized
foreign currency losses (1)
|
|
—
|
|
|
9,085
|
|
|
—
|
|
|
9,085
|
|
Business
restructurings
|
|
4,229
|
|
|
2,186
|
|
|
12,455
|
|
|
15,513
|
|
Debt
extinguishment costs
|
|
—
|
|
|
1,116
|
|
|
—
|
|
|
1,116
|
|
Income
taxes
|
|
(2,691)
|
|
|
(1,761)
|
|
|
(4,892)
|
|
|
(4,597)
|
|
Adjusted
net earnings attributable to Mohawk Industries, Inc.
|
|
$
|
71,842
|
|
|
57,272
|
|
|
191,432
|
|
|
152,108
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
diluted earnings per share attributable to Mohawk Industries,
Inc.
|
|
$
|
1.04
|
|
|
0.83
|
|
|
2.76
|
|
|
2.21
|
|
Weighted-average common shares outstanding -
diluted
|
|
69,337
|
|
|
68,954
|
|
|
69,247
|
|
|
68,946
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Operating Cash Flow to Free Cash
Flow
|
|
|
|
|
|
|
(Amounts in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
September 29, 2012
|
|
|
|
|
|
|
|
|
Net cash
provided by operating activities
|
|
$
|
202,971
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
(47,311)
|
|
|
|
|
|
|
|
|
|
Free cash
flow
|
|
$
|
155,660
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Total Debt to Net
Debt
|
|
|
|
|
|
|
|
|
(Amounts in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 29, 2012
|
|
|
|
|
|
|
|
|
Current
portion of long-term debt
|
|
$
|
57,673
|
|
|
|
|
|
|
|
|
|
Long-term
debt, less current portion
|
|
1,467,269
|
|
|
|
|
|
|
|
|
|
Cash and
cash equivalents
|
|
(380,842)
|
|
|
|
|
|
|
|
|
|
Net
Debt
|
|
$
|
1,144,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Capitalization
|
|
|
|
|
|
|
|
|
(Amounts in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 29, 2012
|
|
|
|
|
|
|
|
|
Current
portion of long-term debt
|
|
$
|
57,673
|
|
|
|
|
|
|
|
|
|
Long-term
debt, less current portion
|
|
1,467,269
|
|
|
|
|
|
|
|
|
|
Total
stockholders' equity
|
|
3,594,935
|
|
|
|
|
|
|
|
|
|
Capitalization
|
|
$
|
5,119,877
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Debt
to Capitalization
|
|
22%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Operating Income to Adjusted
EBITDA
|
|
|
|
|
|
|
(Amounts in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
|
Trailing
Twelve Months Ended
|
|
|
|
December 31, 2011
|
|
March 31, 2012
|
|
June 30, 2012
|
|
September 29, 2012
|
|
September 29,
2012
|
Operating
income
|
|
$
|
66,294
|
|
|
71,976
|
|
|
107,718
|
|
|
103,954
|
|
|
349,942
|
|
Other
(expense) income
|
|
(257)
|
|
|
1,825
|
|
|
(440)
|
|
|
(322)
|
|
|
806
|
|
Net
earnings attributable to noncontrolling interest
|
|
(966)
|
|
|
(635)
|
|
|
—
|
|
|
—
|
|
|
(1,601)
|
|
Depreciation and amortization
|
|
74,930
|
|
|
73,286
|
|
|
71,831
|
|
|
71,298
|
|
|
291,345
|
|
EBITDA
|
|
140,001
|
|
|
146,452
|
|
|
179,109
|
|
|
174,930
|
|
|
640,492
|
|
Operating
lease correction (2)
|
|
6,035
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,035
|
|
Business
restructurings
|
|
7,696
|
|
|
—
|
|
|
8,226
|
|
|
4,229
|
|
|
20,151
|
|
Adjusted
EBITDA
|
|
$
|
153,732
|
|
|
146,452
|
|
|
187,335
|
|
|
179,159
|
|
|
666,678
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Debt
to Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
1.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Sales to Net Sales on a
Constant Exchange Rate
|
|
|
|
(Amounts in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
Nine
Months Ended
|
|
|
|
|
|
|
September 29,
2012
|
|
October 1,
2011
|
|
September 29,
2012
|
|
October 1,
2011
|
|
|
Net
sales
|
|
$
|
1,473,493
|
|
|
1,442,512
|
|
|
4,352,321
|
|
|
4,263,961
|
|
|
|
Adjustment
to net sales on a constant exchange rate
|
|
32,777
|
|
|
—
|
|
|
82,877
|
|
|
—
|
|
|
|
Net sales
on a constant exchange rate
|
|
$
|
1,506,270
|
|
|
1,442,512
|
|
|
4,435,198
|
|
|
4,263,961
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Segment Net Sales to Segment Net
Sales on a Constant Exchange Rate
|
|
|
|
|
|
|
(Amounts in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
|
|
|
|
|
Dal-Tile
|
|
September 29,
2012
|
|
October 1,
2011
|
|
|
|
|
|
|
Net
sales
|
|
$
|
417,533
|
|
|
381,891
|
|
|
|
|
|
|
|
Adjustment
to segment net sales on a constant exchange rate
|
|
1,935
|
|
|
—
|
|
|
|
|
|
|
|
Segment
net sales on a constant exchange rate
|
|
$
|
419,468
|
|
|
381,891
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
|
|
|
|
|
Unilin
|
|
|
September 29,
2012
|
|
October 1,
2011
|
|
|
|
|
|
|
Net
sales
|
|
$
|
328,582
|
|
|
329,514
|
|
|
|
|
|
|
|
Adjustment
to segment net sales on a constant exchange rate
|
|
30,842
|
|
|
—
|
|
|
|
|
|
|
|
Segment
net sales on a constant exchange rate
|
|
$
|
359,424
|
|
|
329,514
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Operating Income to Adjusted
Operating Income
|
|
|
|
|
|
|
(Amounts in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
|
|
|
|
|
|
|
|
September 29,
2012
|
|
October 1,
2011
|
|
|
|
|
|
|
Operating
income
|
|
$
|
103,954
|
|
|
91,464
|
|
|
|
|
|
|
|
Business
restructurings
|
|
4,229
|
|
|
2,186
|
|
|
|
|
|
|
|
Adjusted
operating income
|
|
$
|
108,183
|
|
|
93,650
|
|
|
|
|
|
|
|
Adjusted
operating margin as a percent of net sales
|
|
7.3%
|
|
|
6.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Segment Operating Income to
Adjusted Segment Operating Income
|
|
|
|
|
|
|
(Amounts in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
|
|
|
|
|
Mohawk
|
|
September 29,
2012
|
|
October 1,
2011
|
|
|
|
|
|
|
Operating
income
|
|
$
|
43,810
|
|
|
30,946
|
|
|
|
|
|
|
|
Business
restructurings
|
|
3,122
|
|
|
2,186
|
|
|
|
|
|
|
|
Adjusted
segment operating income
|
|
$
|
46,932
|
|
|
33,132
|
|
|
|
|
|
|
|
Adjusted
operating margin as a percent of net sales
|
|
6.2%
|
|
|
4.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Earnings Before Income Taxes to
Adjusted Earnings Before Income Taxes
|
|
|
|
|
|
|
(Amounts in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
|
|
|
|
|
|
|
|
September 29,
2012
|
|
October 1,
2011
|
|
|
|
|
|
|
Earnings
before income taxes
|
|
$
|
85,663
|
|
|
52,919
|
|
|
|
|
|
|
|
Adjustments to earnings before income
taxes:
|
|
|
|
|
|
|
|
|
|
|
Unrealized
foreign currency losses (1)
|
|
—
|
|
|
9,085
|
|
|
|
|
|
|
|
Business
restructurings
|
|
4,229
|
|
|
2,186
|
|
|
|
|
|
|
|
Debt
extinguishment costs
|
|
—
|
|
|
1,116
|
|
|
|
|
|
|
|
Adjusted
earnings before income taxes
|
|
$
|
89,892
|
|
|
65,306
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Income Tax Expense to Adjusted
Income Tax Expense
|
|
|
|
|
|
|
(Amounts in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
|
|
|
|
|
|
|
|
September 29,
2012
|
|
October 1,
2011
|
|
|
|
|
|
|
Income tax
expense
|
|
$
|
15,359
|
|
|
5,223
|
|
|
|
|
|
|
|
Income tax
effect of business restructurings
|
|
2,691
|
|
|
1,761
|
|
|
|
|
|
|
|
Adjusted
income tax expense
|
|
$
|
18,050
|
|
|
6,984
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
income tax rate
|
|
20%
|
|
|
11%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Unrealized foreign currency losses in Q3 2011 for certain of the
Company's consolidated foreign subsidiaries that measure financial
position and results using the U.S. dollar rather than the local
currency.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)
Correction of an immaterial error related to accounting for
operating leases
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 the
planning and forecasting in subsequent periods.
|
|
|
|
|
|
|
SOURCE Mohawk Industries, Inc.