or Release:

Exhibit 99.1

 

 

For Release:         Immediately

 

Contact:                Frank H. Boykin, Chief Financial Officer

 

 

MOHAWK INDUSTRIES, INC. ANNOUNCES

FOURTH QUARTER AND YEAR EARNINGS

Calhoun, Georgia, February 15, 2005 - Mohawk Industries, Inc. (NYSE:MHK) today announced the quarterly net earnings of $102,470,000 and diluted earnings per share (EPS) of $1.52 for the fourth quarter of 2004.  This compares to $102,142,000 in net earnings and $1.51 in EPS for the fourth quarter of 2003.  Net sales for the quarter increased 8% to $1,475,099,000 from $1,368,542,000 in 2003.  This increase was primarily the result of strong internal growth of both Mohawk and Dal-Tile products and the Lees Carpet acquisition.  Additionally, the fourth quarter of 2004 had four less days when compared to the fourth quarter of 2003.  This reduced comparable sales by approximately 7% with a larger impact on earnings.

The Mohawk segment net sales of $1,103,474,000 in the fourth quarter of 2004 were up 7% from $1,032,807,000 due to internal sales growth as well as the Lees acquisition, which positively impacted segment sales by 3%.  The Dal-Tile segment net sales of $371,625,000 in the fourth quarter of 2004 grew 11% from $335,735,000 primarily from internal growth. 

Net earnings for the year 2004 were $368,622,000 (19% above last year), or $5.46 in EPS (18% above last year), compared to $310,149,000 in net earnings, or $4.62 in EPS, for the year 2003.  This increase in EPS and earnings is attributable to strong sales growth, better leverage of selling, general and administrative costs and the Lees acquisition, offset by higher raw material and energy costs. Net sales for the year 2004 increased 18% to $5,880,372,000 from $4,999,381,000.  This sales increase resulted primarily from internal growth in both the Mohawk and Dal-Tile segments and the acquisition of Lees.  Prior period amounts have been reclassified to reflect certain distribution costs in selling, general and administrative expense (previously in cost of sales) and certain freight backhaul credits in cost of sales (previously in revenues) to conform to current classification.

In commenting on the fourth quarter results, Jeffrey S. Lorberbaum, Chairman and CEO, stated, "We are pleased with the positive fourth quarter results in this time of rising raw material costs. Our company continues to manage costs and pricing to offset raw material and energy costs increases during the quarter. Although the timing of selling price and material cost increases continues to impact earnings, our gross margin as a percent of sales for the quarter was down only slightly from last year largely due to the fewer days in the quarter.  This also impacted selling, general and administrative expense as a percent of net sales during the quarter.  The full year comparison showing improvement from 17.0% to 16.8% is more reflective of our business. Our overall results for the quarter would have been stronger when compared to 2003 if a comparable number of days were used.

The Mohawk segment continued its strong growth in all channels as consumers are more optimistic about their financial future.  Our customers are embracing our regional market concept and are positive about the coming year.  Additionally, new residential housing remains strong with the commercial business continuing to improve.

 The Dal-Tile segment continued its strong growth driven by our investment in new products, inventory availability, additional sales personnel and updated sales service centers. All product categories are achieving positive growth led by floor tile and stone.  The Muskogee plant is running at full capacity with an improving product mix.

Our suppliers for the Mohawk segment have continued to raise their prices since our October price increase. We have announced price increases in the first quarter to offset these changes but there will be a lag between the cost increases and the implementation of new selling prices.  We believe these cost increases will moderate over the long-term but the short-term trend of these costs remains uncertain.


Our balance sheet is strong with 25% debt to capitalization providing much flexibility for future investments.  We continue to invest in our business with major expansions planned in ceramic tile production, extrusion and yarn processing and warehousing.

During the fourth quarter, we introduced our latest Mohawk fiber brand, Smartstrand® made with Dupont™ Sorona® polymer.  SmartStrand is a superior carpet fiber with the resilience of nylon, engineered-in stain resistance and an inherently soft touch.  By offering the consumer a revolutionary product with the strength of two of the most recognized brands in flooring.  Mohawk's SmartStrand is poised for success.

We recently completed the acquisition of Wayn-Tex Inc., a carpet-backing manufacturer.  The purchase of these assets enhances our position in the marketplace. Mohawk requirements exceed the current production of the facilities and we are implementing changes to improve the efficiencies. 

Finally, I am proud to report that Forbes Magazine has recognized Mohawk Industries as one of the 400 Best Companies in America.  In addition, Sears and Home Expo named Karastan "Vendor of the Year" as recognition for our outstanding service & superior product.  Dal-Tile was voted "Best Business Experience" by commercial designers. These are additional indications of the strength of our organization as we strive to continue providing superior value to our customers."

The company believes the economy will continue to expand with the flooring industry expected to grow at historical rates.  However, commodity prices remain uncertain and passing them through to our customers will affect the short-term future.   After considering these factors, the first quarter of 2005 earnings forecast range is from $1.03 to $1.12 EPS.

Certain of the statements in the immediately preceding paragraphs, particularly anticipating future performance, business prospects, growth and operating strategies, proposed acquisitions, and similar matters, and those that include the words "believes," "anticipates," "forecast," "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; raw material and energy prices; timing and level of capital expenditures; integration of acquisitions; introduction of new products; rationalization of operations; and other risks identified in Mohawk's SEC reports and public announcements.

 

Mohawk is a leading supplier of flooring for both residential and commercial applications.  Mohawk offers a complete selection of carpet, ceramic tile, wood, stone, laminate, vinyl, rugs and other home products.  These products are marketed under the premier brands in the industry, which include Mohawk, Karastan, Ralph Lauren, Lees, Bigelow, Dal-Tile and American Olean.  Mohawk's unique merchandising and marketing assist our customers in creating the consumers' dream.  Mohawk provides a premium level of service with its own trucking fleet and over 250 local distribution locations. 

 

There will be a conference call Wednesday, February 16, 2005 at 11:00 AM Eastern Time.

The telephone number to call is 1-800-603-9255.  A conference call

replay will also be available until Monday, February 28, 2004 by dialing 1-800-642-1687

for US/local calls and (706) 645-9291 for international calls and entering

Conference ID # 3991715.

DATES FOR FUTURE PRESS RELEASES AND CONFERENCE CALLS:

PRESS RELEASE

CONFERENCE CALL

1st QUARTER 2005

APRIL 21, 2005

APRIL 22, 2005

11:00AM  (800-603-9255)

2nd QUARTER 2005

JULY 21, 2005

JULY 22, 2005

11:00AM (800-603-9255)

3rd QUARTER 2005

OCTOBER 18, 2005

OCTOBER 19, 2005

11:00AM (800-603-9255)

4th QUARTER 2005

FEBRUARY 2, 2006

FEBRUARY 3, 2006

11:00AM (800-603-9255)

  


 

MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES
Consolidated Statement of Earnings Data Three Months Ended Twelve Months Ended
(Amounts in thousands, except per share data) December 31, 2004 December 31, 2003 December 31, 2004 December 31, 2003
Net sales  $            1,475,099                   1,368,542                 5,880,372                   4,999,381 
Cost of sales                1,059,176                        979,607                   4,259,531                     3,605,579 
    Gross profit                   415,923                      388,935                 1,620,841                   1,393,802 
Selling, general and administrative expenses                   243,103                        214,571                      985,251                        851,773 
    Operating income                   172,820                      174,364                    635,590                      542,029 
Interest expense                     12,308                        14,228                      53,392                        55,575 
Other (income) expense, net                           (71)                            (728)                         4,809                          (1,980)
    Earnings before income taxes                   160,583                      160,864                    577,389                      488,434 
Income taxes                     58,113                          58,722                      208,767                        178,285 
    Net earnings  $               102,470                        102,142                      368,622                        310,149 
Basic earnings per share  $                     1.54                              1.54                            5.53                              4.68 
Weighted-average shares outstanding                     66,689                          66,504                        66,682                          66,251 
Diluted earnings per share  $                     1.52                              1.51                            5.46                              4.62 
Weighted-average common and dilutive
potential common shares outstanding                     67,595                          67,434                        67,557                          67,121 
Other Financial Information
(Amounts in thousands)
Net cash provided by operating activities  $                 46,799                        156,946                      242,837                        309,390 
Depreciation & amortization  $                 30,014                        29,171                    123,088                      106,615 
Capital expenditures  $                 36,219                          34,308                      106,601                        114,631 
Consolidated Balance Sheet Data
(Amounts in thousands)
December 31, 2004 December 31, 2003
ASSETS
Current assets:
    Receivables  $               660,650                      573,500 
    Inventories                1,017,983                      832,415 
    Prepaid expenses                     49,381                        43,043 
    Deferred income taxes                             55,311                          84,260 
        Total current assets                1,783,325                   1,533,218 
Property, plant and equipment, net                   905,332                      919,085 
Goodwill                1,377,349                   1,368,700 
Other assets                           337,112                        342,572 
           $            4,403,118                     4,163,575 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt  $               191,341                      302,968 
Accounts payable and accrued expenses                           623,061                        637,940 
        Total current liabilities                   814,402                      940,908 
Long-term debt, less current portion                   700,000                      709,445 
Deferred income taxes and other long-term liabilities                           222,379                        215,421 
        Total liabilities                        1,736,781                     1,865,774 
Total stockholders' equity                        2,666,337                     2,297,801 
           $            4,403,118                     4,163,575 
Segment Information As of or for the Three Months Ended As of or for the Twelve Months Ended
(Amounts in thousands) December 31, 2004 December 31, 2003 December 31, 2004 December 31, 2003
Net sales:
    Mohawk  $            1,103,474                   1,032,807                 4,368,831                   3,730,845 
    Dal-Tile                   371,625                        335,735                   1,511,541                     1,268,536 
        Consolidated net sales  $            1,475,099                     1,368,542                   5,880,372                     4,999,381 
Operating income:
    Mohawk  $               124,073                      128,987                    424,256                      364,040 
    Dal-Tile                     51,784                        49,496                    219,831                      187,245 
    Corporate and eliminations                      (3,037)                         (4,119)                        (8,497)                         (9,256)
        Consolidated operating income  $               172,820                        174,364                      635,590                        542,029 
Assets:
    Mohawk  $            2,257,153                   2,086,716 
    Dal-Tile                2,063,195                   1,967,206 
    Corporate and eliminations                             82,770                        109,653 
        Consolidated assets          $            4,403,118                     4,163,575 

 

UNITED STATES  

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 15, 2005


MOHAWK INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)

Delaware
(State or Other
Jurisdiction of
Incorporation)

01-19826
(Commission File
Number)

52-1604305
(IRS Employer
Identification No.)

 

 

 

160 South Industrial Blvd., Calhoun, Georgia

30701

(Address of Principal Executive Offices)

 (Zip Code)

 

Registrant's telephone number, including area code (706) 629-7721

__________________________________________________________________________________
(Former Name or Former Address, if Changed Since Last Report)

      Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 o Written communication pursuant to Rule 425 under Securities Act (17 CFR 230.425)
 o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act CFR 240.14d-2(b))
 o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act CFR 240.17R 240.13e-4(c))

 



Item 2.02  Results of Operations and Financial Condition.

On February 15, 2005, Mohawk Industries, Inc. issued a press release announcing its fourth quarter and twelve months financial results. A copy of the press release is attached hereunto as Exhibit 99.1.

 

Item 9.01. Financial Statements and Exhibits.

C. Exhibits

99.1 Press release dated February 15, 2005.

 


SIGNATURES


 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

                                                                                                Mohawk Industries, Inc.

                                                                                                        

                  Date: February 15, 2005                                          By: /s/ FRANK H. BOYKIN

                                                                                                                  Frank H. Boykin

                                                                                                            Chief Financial Officer



INDEX TO EXHIBITS

Exhibit

 

99.1.    Press release dated February 15, 2005.