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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): July 19, 2007 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))

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Item 2.02  Results of Operations and Financial Condition.

The following information, including the Exhibit attached hereto, is being furnished pursuant to this Item 2.02 and shall not be deemed "filed" for purpose of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

On July 19, 2007, Mohawk Industries, Inc.,  issued a press release announcing its second quarter financial results. A copy of the press release is attached hereto and hereby incorporated by reference as Exhibit 99.1.

Item 9.01. Financial Statements and Exhibits.

(d)  Exhibits

99.1 Press release dated July 19, 2007.

 

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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: July 19, 2007                                               By: /s/ THOMAS  J. KANUK

Thomas J. Kanuk

V.P.  & Corporate Controller

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INDEX TO EXHIBITS

Exhibit

99.1.    Press release dated July 19, 2007.

 Exhibit 99.1

For Release:              Immediately
Contact:                      Frank H. Boykin, Chief Financial Officer

 

MOHAWK INDUSTRIES, INC. ANNOUNCES
SECOND QUARTER EARNINGS

 

Calhoun, Georgia, July 19, 2007 - Mohawk Industries, Inc. (NYSE:MHK) today announced 2007 second quarter net earnings of $115 million and diluted earnings per share (EPS) of $1.68 (both 4% below last year).  Net sales for the quarter were $1,977 million, a decrease of 4% from 2006. During the quarter the Company had strong cash flow from operations of $226 million and EBITDA of $276 million.  In addition, debt of $208 million was paid down during the quarter reducing the Company debt to capital ratio to 38%.   For the first half of 2007, net earnings were $206 million and EPS was $3.01 (both 3% above last year).  Net sales for the first half of 2007 were $3,841 million representing a 4% decrease from 2006.   The sales decreases for both the quarter and the year to date are attributable to slowing U.S. industry demand in the residential new construction and redecorating business.

In commenting on the second quarter results, Jeffrey S. Lorberbaum, Chairman and CEO, stated:   "Second quarter earnings were ahead of our guidance for the quarter.  The European business maintained its strong growth and performance partially offsetting the cyclical down turn in the U.S. Our U.S. commercial business continued performing better than our residential business.  U.S. residential flooring is in a cyclical downturn with soft sales in the new home and consumer redecorating categories.  During the quarter, Mohawk took another important step in its strategy to become a complete provider of floor covering with the announced acquisition of four wood manufacturing plants.

The Mohawk segment sales for the quarter were off 10% from last year as the industry suffered from slow residential sales. Our comps will become easier in the third quarter because industry sales began declining in this period last year.  Commercial sales were stronger than residential as modular carpet continued to gain market share. Raw material costs increased during the quarter and we announced a carpet price increase in May of 4% to 6% which we began implementing in June. Promotions continue at a greater pace to stimulate sales and balance asset utilization in the industry.  

The Dal-Tile segment sales for the quarter were slightly below last year. We believe we are performing better than market due to the earlier investments made in sales, products and marketing. Commercial sales are offsetting some of the weakness in residential. Selected price increases were implemented in the quarter and surcharges are being applied to cover increased transportation and energy costs. We are reducing our controllable costs but margins are lower due to infrastructure investments in distribution and sales personnel to maximize sales and unabsorbed overhead from lower production schedules. Our Dal-Tile team is implementing multiple initiatives to reduce costs, improve efficiency and manage working capital. We are increasing production as we continue to shift products to our own facilities which were previously sourced externally.

Our Unilin segment turned in a strong performance for the quarter with sales up 16% over last year.  The European economy is strong while the U.S. residential market remains weak.  The strong Euro positively impacted sales by 5% and operating income by $5 million. Our patents continue to gain strength and we entered new license agreements growing revenues.  Our Unilin segment results were the highest ever but we anticipate results in the second half to be more in line with past performance.

Our agreement with Columbia Forest Products to acquire two solid wood plants and one engineered plant in the U.S. and one engineered plant in Malaysia is expected to close in the third quarter.  The plants are currently experiencing losses, but the business is expected to be accretive after the first year.  After the acquisition, Mohawk will be the second largest producer in the pre-finished wood category, which is expected to grow between 6% to 8% over time.  The transaction is subject to customary government approvals and closing conditions.

We are focused on environmental stewardship and will be presenting our many initiatives under a program identified as Greenworks.  This program includes recycling both post consumer and industrial waste, utilizing bio-based raw materials and energy, and reducing water usage, energy consumption and emissions.  Greenworks is beneficial for our customers, our communities and the environment. 

During the period, no payments were received from U.S. Customs for duty refunds.  In the future, we expect additional payments though the timing and amount are not known at this point."

The Company expects the U.S. residential environment to continue to be difficult during the third quarter.  The management team is committed to maintaining the proper balance between cost cutting and being prepared for a future turnaround.  Based on these factors, the guidance for the third quarter of 2007 is $1.61 to $1.70 EPS.

Certain of the statements in the immediately preceding paragraphs, particularly anticipating future performance and business prospects constitute "forward-looking statements" under 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, including our ability to successfully implement our plans, 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, laminate, wood, stone, 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, American Olean, Unilin and Quick Step.  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 Friday, July 20, 2007 at 11:00 AM Eastern Time.
The telephone number to call is 1-800-603-9255 for US/Canada and 1-706-634-2294 for International/Local.
 A conference call replay will also be available until July 27, 2007 by dialing 1-800-642-1687
for US/local calls and 1-706-645-9291 for International/Local calls and entering Conference ID # 4827114.

 

MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES
Consolidated Statement of Earnings Data		Three Months Ended					Six Months Ended
(Amounts in thousands, except per share data)		June 30, 2007			July 1, 2006		June 30, 2007			July 1, 2006
Net sales		$	1,977,210		2,058,123		3,841,073			3,983,229
Cost of sales		1,420,512			1,465,745		2,760,935			2,874,507
Gross profit		556,698			592,378		1,080,138			1,108,722
Selling, general and administrative expenses		358,450			369,333		711,313			721,776
Operating income		198,248			223,045		368,825			386,946
Interest expense		39,138			46,123		80,717			86,458
Other (income) expense, net		(2,783)			3,598		1,444			6,325
U.S. Customs refund		-			(6,232)		(9,122)			(6,232)
Earnings before income taxes		161,893			179,556		295,786			300,395
Income taxes		46,625			60,043		90,140			101,761
Net earnings		$	115,268		119,513		205,646			198,634
Basic earnings per share		$	1.69		1.77		3.02			2.94
Weighted-average shares outstanding		68,167			67,693		68,037			67,629
Diluted earnings per share		$	1.68		1.76		3.01			2.92
Weighted-average common and dilutive
potential common shares outstanding		68,533			68,067		68,394			68,073
Other Financial Information
(Amounts in thousands)
Net cash provided by operating activities		$	225,685		238,181		314,452			342,707
Depreciation & amortization		$	75,382		69,781		149,228			134,634
Capital expenditures		$	35,428		37,027		60,384			82,659
Consolidated Balance Sheet Data
(Amounts in thousands)							June 30, 2007			July 1, 2006
ASSETS
Current assets:
Cash & cash equivalents							$	57,763		73,398
Receivables							968,103			987,626
Inventories							1,229,326			1,283,931
Prepaid expenses							121,625			134,087
Deferred income taxes							173,252			41,427
Total current assets							2,550,069			2,520,469
Property, plant and equipment, net							1,858,282			1,904,803
Goodwill							2,719,724			2,691,910
Intangible assets							1,153,761			1,196,310
Other assets							27,972			34,319
							$	8,309,808		8,347,811
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt							$	364,114		530,626
Accounts payable and accrued expenses							1,031,237			1,146,904
Total current liabilities							1,395,351			1,677,530
Long-term debt, less current portion							2,137,349			2,596,412
Deferred income taxes and other long-term liabilities							768,278			654,332
Total liabilities							4,300,978			4,928,274
Total stockholders' equity							4,008,830			3,419,537
							$	8,309,808		8,347,811
Segment Information		As of or for the Three Months Ended					As of or for the Six Months Ended
(Amounts in thousands)		June 30, 2007			July 1, 2006		June 30, 2007			July 1, 2006
Net sales:
Mohawk		$	1,113,412		1,241,992		2,161,073			2,392,538
Dal-Tile		505,187			506,914		972,148			980,824
Unilin		363,531			313,765		715,627			616,395
Corporate and eliminations		(4,920)			(4,548)		(7,775)			(6,528)
Consolidated net sales		$	1,977,210		2,058,123		3,841,073			3,983,229
Operating income:
Mohawk		$	59,730		98,993		108,175			164,606
Dal-Tile		69,353			74,042		133,748			143,644
Unilin		81,737			59,657		142,236			99,676
Corporate and eliminations		(12,572)			(9,647)		(15,334)			(20,980)
Consolidated operating income		$	198,248		223,045		368,825			386,946
Assets:
Mohawk							$	2,448,907		2,622,196
Dal-Tile							2,297,745			2,270,910
Unilin							3,333,319			3,353,389
Corporate and eliminations							229,837			101,316
Consolidated assets							$	8,309,808		8,347,811

	Reconciliation of EBITDA and Debt to capital percentage
			Three Months Ended
	(Amounts in thousands)		June 30, 2007
	EBITDA reconciliation:
	Operating income		$	198,248
	Other (expense)/income		2,783
	Depreciation and amortization		75,382
	EBITDA		$	276,413
	Outstanding Debt (a)		$	2,501,463
	Total stockholders' equity		4,008,830
	Total capital (b)		$	6,510,293
	Debt to capital (a)/(b)		38 %
	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.