Mohawk Industries, Inc. Announces First Quarter Earnings
Record Q1 Adjusted EPS; 38% Increase Over PY
Adjusted Operating Income Up 170 bps
Commenting on
Carpet Segment net sales for the quarter were
Ceramic Segment net sales for the quarter were
Laminate and Wood Segment net sales for the quarter were
We were pleased with our progress during the first quarter and anticipate the improving U.S. economy and a stronger flooring market will benefit our business for the remainder of the year. In the U.S., continued economic and income growth, low gasoline prices and interest rates and increased home values should drive our business throughout 2015. We expect our European sales in local currency to improve slightly, with new product innovations enhancing our mix along with manufacturing and productivity initiatives improving margins. In
We anticipate significant opportunities with our IVC acquisition, which will expand our participation in the LVT and fiberglass sheet vinyl categories in the U.S. and
ABOUT
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
Conference call
The telephone number is 1-800-603-9255 for US/
MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES |
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Consolidated Statement of Operations |
Three Months Ended |
|||
(Amounts in thousands, except per share data) |
April 4, 2015 |
March 29, 2014 |
||
Net sales |
$ 1,881,177 |
1,813,095 |
||
Cost of sales |
1,369,234 |
1,331,740 |
||
Gross profit |
511,943 |
481,355 |
||
Selling, general and administrative expenses |
468,169 |
350,620 |
||
Operating income |
43,774 |
130,735 |
||
Interest expense |
16,449 |
22,096 |
||
Other expense (income), net |
(1,083) |
4,890 |
||
Earnings from continuing operations before income taxes |
28,408 |
103,749 |
||
Income tax expense |
5,904 |
22,696 |
||
Net earnings including noncontrolling interest |
22,504 |
81,053 |
||
Net earnings (loss) attributable to noncontrolling interest |
158 |
(28) |
||
Net earnings attributable to Mohawk Industries, Inc. |
$ 22,346 |
81,081 |
||
Basic earnings per share attributable to Mohawk Industries, Inc. |
||||
Basic earnings per share attributable to Mohawk Industries, Inc. |
$ 0.31 |
1.11 |
||
Weighted-average common shares outstanding - basic |
72,988 |
72,742 |
||
Diluted earnings per share attributable to Mohawk Industries, Inc. |
||||
Diluted earnings per share attributable to Mohawk Industries, Inc. |
$ 0.30 |
1.11 |
||
Weighted-average common shares outstanding - diluted |
73,530 |
73,282 |
||
Other Financial Information |
||||
(Amounts in thousands) |
||||
Depreciation and amortization |
$ 85,656 |
80,984 |
||
Capital expenditures |
$ 105,794 |
122,081 |
||
Consolidated Balance Sheet Data |
||||
(Amounts in thousands) |
||||
April 4, 2015 |
March 29, 2014 |
|||
ASSETS |
||||
Current assets: |
||||
Cash and cash equivalents |
$ 107,041 |
72,645 |
||
Receivables, net |
1,158,858 |
1,174,895 |
||
Inventories |
1,505,632 |
1,632,236 |
||
Prepaid expenses and other current assets |
285,261 |
249,690 |
||
Deferred income taxes |
147,027 |
133,808 |
||
Total current assets |
3,203,819 |
3,263,274 |
||
Property, plant and equipment, net |
2,618,633 |
2,745,057 |
||
Goodwill |
1,553,155 |
1,721,792 |
||
Intangible assets, net |
661,846 |
796,896 |
||
Deferred income taxes and other non-current assets |
247,169 |
154,469 |
||
Total assets |
$ 8,284,622 |
8,681,488 |
||
LIABILITIES AND STOCKHOLDERS' EQUITY |
||||
Current liabilities: |
||||
Current portion of long-term debt and commercial paper |
$ 1,806,175 |
654,871 |
||
Accounts payable and accrued expenses |
1,085,805 |
1,188,644 |
||
Total current liabilities |
2,891,980 |
1,843,515 |
||
Long-term debt, less current portion |
606,080 |
1,811,789 |
||
Deferred income taxes and other long-term liabilities |
562,767 |
532,740 |
||
Total liabilities |
4,060,827 |
4,188,044 |
||
Total stockholders' equity |
4,223,795 |
4,493,444 |
||
Total liabilities and stockholders' equity |
$ 8,284,622 |
8,681,488 |
||
Segment Information |
As of and for the Three Months Ended |
|||
(Amounts in thousands) |
April 4, 2015 |
March 29, 2014 |
||
Net sales: |
||||
Carpet |
$ 739,264 |
674,926 |
||
Ceramic |
719,828 |
695,094 |
||
Laminate and Wood |
448,398 |
468,008 |
||
Intersegment sales |
(26,313) |
(24,933) |
||
Consolidated net sales |
$ 1,881,177 |
1,813,095 |
||
Operating income (loss): |
||||
Carpet |
$ (89,994) |
34,271 |
||
Ceramic |
85,327 |
60,659 |
||
Laminate and Wood |
58,901 |
44,119 |
||
Corporate and eliminations |
(10,460) |
(8,314) |
||
Consolidated operating income |
$ 43,774 |
130,735 |
||
Assets: |
||||
Carpet |
$ 2,015,550 |
1,920,937 |
||
Ceramic |
3,584,471 |
3,782,006 |
||
Laminate and Wood |
2,406,286 |
2,788,839 |
||
Corporate and eliminations |
278,315 |
189,706 |
||
Consolidated assets |
$ 8,284,622 |
8,681,488 |
||
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 |
|||||||||||
April 4, 2015 |
March 29, 2014 |
||||||||||
Net earnings attributable to Mohawk Industries, Inc. |
$ 22,346 |
81,081 |
|||||||||
Adjusting items: |
|||||||||||
Restructuring, acquisition and integration-related costs |
12,529 |
11,725 |
|||||||||
Legal settlement and reserve |
125,000 |
- |
|||||||||
Deferred loan costs |
651 |
- |
|||||||||
Income taxes |
(35,554) |
(2,391) |
|||||||||
Adjusted net earnings attributable to Mohawk Industries, Inc. |
$ 124,972 |
90,415 |
|||||||||
Adjusted diluted earnings per share attributable to Mohawk Industries, Inc. |
$ 1.70 |
1.23 |
|||||||||
Weighted-average common shares outstanding - diluted |
73,530 |
73,282 |
|||||||||
Reconciliation of Adjusted Diluted Earnings Per Share on a Constant Exchange Rate |
|||||||||||
Three Months Ended |
|||||||||||
April 4, 2015 |
|||||||||||
Adjusted diluted earnings per share attributable to Mohawk Industries, Inc. |
$ 1.70 |
||||||||||
Adjustment to constant exchange rate |
0.20 |
||||||||||
Adjusted diluted earnings per share attributable to Mohawk Industries, Inc. on a constant exchange rate |
$ 1.90 |
||||||||||
Reconciliation of Total Debt to Net Debt |
|||||||||||
(Amounts in thousands) |
|||||||||||
April 4, 2015 |
|||||||||||
Current portion of long-term debt and commercial paper |
$ 1,806,175 |
||||||||||
Long-term debt, less current portion |
606,080 |
||||||||||
Less: Cash and cash equivalents |
107,041 |
||||||||||
Net Debt |
$ 2,305,214 |
||||||||||
Reconciliation of Operating Income to Adjusted EBITDA |
|||||||||||
(Amounts in thousands) |
Trailing Twelve |
||||||||||
Three Months Ended |
Months Ended |
||||||||||
June 28, 2014 |
September 27, 2014 |
December 31, 2014 |
April 4, 2015 |
April 4, 2015 |
|||||||
Operating income |
$ 222,248 |
213,693 |
206,120 |
43,774 |
685,835 |
||||||
Other (expense) income |
1,555 |
2,374 |
(9,737) |
1,083 |
(4,725) |
||||||
Net (earnings) loss attributable to non-controlling interest |
(111) |
6 |
(212) |
(158) |
(475) |
||||||
Depreciation and amortization |
83,754 |
85,167 |
95,665 |
85,656 |
350,242 |
||||||
EBITDA |
307,446 |
301,240 |
291,836 |
130,355 |
1,030,877 |
||||||
Restructuring, acquisition and integration-related costs |
10,224 |
11,311 |
21,859 |
8,169 |
51,563 |
||||||
Legal settlement and reserve |
- |
10,000 |
- |
125,000 |
135,000 |
||||||
Adjusted EBITDA |
$ 317,670 |
322,551 |
313,695 |
263,524 |
1,217,440 |
||||||
Net Debt to Adjusted EBITDA |
1.9 |
||||||||||
Reconciliation of Net Sales to Net Sales on a Constant Exchange Rate and Shipping Days |
|||||||||||
(Amounts in thousands) |
|||||||||||
Three Months Ended |
|||||||||||
April 4, 2015 |
March 29, 2014 |
||||||||||
Net sales |
$ 1,881,177 |
1,813,095 |
|||||||||
Adjustment to net sales on constant shipping days |
(105,125) |
- |
|||||||||
Adjustment to net sales on a constant exchange rate |
136,782 |
- |
|||||||||
Net sales on a constant exchange rate and shipping days |
$ 1,912,834 |
1,813,095 |
|||||||||
Reconciliation of Segment Net Sales to Segment Net Sales on a Constant Exchange Rate and Shipping Days |
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(Amounts in thousands) |
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Three Months Ended |
|||||||||||
Carpet |
April 4, 2015 |
March 29, 2014 |
|||||||||
Net sales |
$ 739,264 |
674,926 |
|||||||||
Adjustment to net sales on constant shipping days |
(40,500) |
- |
|||||||||
Adjustment to segment net sales on a constant exchange rate |
- |
- |
|||||||||
Segment net sales on a constant exchange rate and shipping days |
$ 698,764 |
674,926 |
|||||||||
Reconciliation of Segment Net Sales to Proforma Segment Net Sales on a Constant Exchange Rate and Shipping Days |
|||||||||||
(Amounts in thousands) |
|||||||||||
Three Months Ended |
|||||||||||
Ceramic |
April 4, 2015 |
March 29, 2014 |
|||||||||
Net sales |
$ 719,828 |
695,094 |
|||||||||
Adjustment to net sales on constant shipping days |
(37,449) |
- |
|||||||||
Adjustment to segment net sales on a constant exchange rate |
66,882 |
- |
|||||||||
Exclusion of sales from 2014 disposal of French Ceramic Subsidiary |
- |
(8,700) |
|||||||||
Segment proforma net sales on a constant exchange rate and shipping days |
$ 749,261 |
686,394 |
|||||||||
Reconciliation of Segment Net Sales to Segment Net Sales on a Constant Exchange Rate and Shipping Days |
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(Amounts in thousands) |
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Three Months Ended |
|||||||||||
Laminate and Wood |
April 4, 2015 |
March 29, 2014 |
|||||||||
Net sales |
$ 448,398 |
468,008 |
|||||||||
Adjustment to net sales on constant shipping days |
(27,176) |
- |
|||||||||
Adjustment to segment net sales on a constant exchange rate |
69,900 |
- |
|||||||||
Segment net sales on a constant exchange rate and shipping days |
$ 491,122 |
468,008 |
|||||||||
Reconciliation of Gross Profit to Adjusted Gross Profit |
|||||||||||
(Amounts in thousands) |
|||||||||||
Three Months Ended |
|||||||||||
April 4, 2015 |
March 29, 2014 |
||||||||||
Gross Profit |
$ 511,943 |
481,355 |
|||||||||
Adjustments to gross profit: |
|||||||||||
Restructuring and integration-related costs |
9,976 |
5,637 |
|||||||||
Adjusted gross profit |
$ 521,919 |
486,992 |
|||||||||
Adjusted gross profit as a percent of net sales |
27.7% |
26.9% |
|||||||||
Reconciliation of Selling, General and Administrative Expenses to Adjusted Selling, General and Administrative Expenses |
|||||||||||
(Amounts in thousands) |
|||||||||||
Three Months Ended |
|||||||||||
April 4, 2015 |
March 29, 2014 |
||||||||||
Selling, general and administrative expenses |
$ 468,169 |
350,620 |
|||||||||
Adjustments to selling, general and administrative expenses: |
|||||||||||
Restructuring, acquisition and integration-related costs |
(2,553) |
(6,088) |
|||||||||
Legal settlement and reserve |
(125,000) |
- |
|||||||||
Adjusted selling, general and administrative expenses |
$ 340,616 |
344,532 |
|||||||||
Adjusted selling, general and administrative expenses as a percent of net sales |
18.1% |
19.0% |
|||||||||
Reconciliation of Operating Income to Adjusted Operating Income |
|||||||||||
(Amounts in thousands) |
|||||||||||
Three Months Ended |
|||||||||||
April 4, 2015 |
March 29, 2014 |
||||||||||
Operating income |
$ 43,774 |
130,735 |
|||||||||
Adjustments to operating income: |
|||||||||||
Restructuring, acquisition and integration-related costs |
12,529 |
11,725 |
|||||||||
Legal settlement and reserve |
125,000 |
- |
|||||||||
Adjusted operating income |
$ 181,303 |
142,460 |
|||||||||
Adjusted operating income as a percent of net sales |
9.6% |
7.9% |
|||||||||
Reconciliation of Adjusted Operating Income on a Constant Exchange Rate |
|||||||||||
(Amounts in thousands) |
|||||||||||
Three Months Ended |
|||||||||||
April 4, 2015 |
March 29, 2014 |
||||||||||
Operating income |
$ 43,774 |
130,735 |
|||||||||
Adjustments to operating income: |
|||||||||||
Restructuring, acquisition and integration-related costs |
12,529 |
11,725 |
|||||||||
Legal settlement and reserve |
125,000 |
- |
|||||||||
Adjustment to operating income on constant exchange rates of Euro/USD: 1.12 vs 1.37 and Ruble/USD: 61.87 vs 35.01 |
21,000 |
- |
|||||||||
Adjusted operating income on a constant exchange rate |
$ 202,303 |
142,460 |
|||||||||
Reconciliation of Segment Operating Income to Adjusted Segment Operating Income |
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(Amounts in thousands) |
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Three Months Ended |
|||||||||||
Carpet |
April 4, 2015 |
March 29, 2014 |
|||||||||
Operating income |
$ (89,994) |
34,271 |
|||||||||
Adjustment to segment operating income: |
|||||||||||
Restructuring, acquisition and integration-related costs |
5,945 |
- |
|||||||||
Legal settlement and reserve |
125,000 |
- |
|||||||||
Adjusted segment operating income |
$ 40,951 |
34,271 |
|||||||||
Adjusted operating income as a percent of net sales |
5.5% |
5.1% |
|||||||||
Reconciliation of Segment Operating Income to Adjusted Segment Operating Income |
|||||||||||
(Amounts in thousands) |
|||||||||||
Three Months Ended |
|||||||||||
Ceramic |
April 4, 2015 |
March 29, 2014 |
|||||||||
Operating income |
$ 85,327 |
60,659 |
|||||||||
Adjustments to segment operating income: |
|||||||||||
Restructuring, acquisition and integration-related costs |
362 |
1,981 |
|||||||||
Adjusted segment operating income |
$ 85,689 |
62,640 |
|||||||||
Adjusted operating income as a percent of net sales |
11.9% |
9.0% |
|||||||||
Reconciliation of Segment Operating Income to Adjusted Segment Operating Income on a Constant Exchange Rate |
|||||||||||
(Amounts in thousands) |
|||||||||||
Three Months Ended |
|||||||||||
Ceramic |
April 4, 2015 |
March 29, 2014 |
|||||||||
Operating income |
$ 85,327 |
60,659 |
|||||||||
Adjustments to segment operating income: |
|||||||||||
Restructuring, acquisition and integration-related costs |
362 |
1,981 |
|||||||||
Adjustment to operating income on constant exchange rates of Euro/USD: 1.12 vs 1.37 and Ruble/USD: 61.87 vs 35.01 |
10,000 |
- |
|||||||||
Adjusted segment operating income on a constant exchange rate |
$ 95,689 |
62,640 |
|||||||||
Reconciliation of Segment Operating Income to Adjusted Segment Operating Income |
|||||||||||
(Amounts in thousands) |
|||||||||||
Three Months Ended |
|||||||||||
Laminate and Wood |
April 4, 2015 |
March 29, 2014 |
|||||||||
Operating income |
$ 58,901 |
44,119 |
|||||||||
Adjustment to segment operating income: |
|||||||||||
Restructuring, acquisition and integration-related costs |
5,035 |
9,576 |
|||||||||
Adjusted segment operating income |
$ 63,936 |
53,695 |
|||||||||
Adjusted operating income as a percent of net sales |
14.3% |
11.5% |
|||||||||
Reconciliation of Segment Operating Income to Adjusted Segment Operating Income on a Constant Exchange Rate |
|||||||||||
(Amounts in thousands) |
|||||||||||
Three Months Ended |
|||||||||||
Laminate and Wood |
April 4, 2015 |
March 29, 2014 |
|||||||||
Operating income |
$ 58,901 |
44,119 |
|||||||||
Adjustments to segment operating income: |
|||||||||||
Restructuring, acquisition and integration-related costs |
5,035 |
9,576 |
|||||||||
Adjustment to operating income on a constant exchange rate of Euro/USD: 1.12 vs 1.37 |
11,000 |
- |
|||||||||
Adjusted segment operating income on a constant exchange rate |
$ 74,936 |
53,695 |
|||||||||
Reconciliation of Income Tax Expense to Adjusted Income Tax Expense |
|||||||||||
(Amounts in thousands) |
|||||||||||
Three Months Ended |
|||||||||||
April 4, 2015 |
March 29, 2014 |
||||||||||
Income tax expense |
$ 5,904 |
22,696 |
|||||||||
Income tax effect of adjusting items |
35,554 |
2,391 |
|||||||||
Adjusted income tax expense |
$ 41,458 |
25,087 |
|||||||||
Adjusted income tax rate |
25% |
22% |
|||||||||
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 and integration-related costs is useful because it allows investors to evaluate our performance for different periods on a more comparable basis. |
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/mohawk-industries-inc-announces-first-quarter-earnings-300079924.html
SOURCE
Frank H. Boykin, Chief Financial Officer (706) 624-2695