CALHOUN, Ga., Jul 15, 2002 /PRNewswire-FirstCall via COMTEX/ -- Mohawk Industries, Inc. (NYSE: MHK) today announced record net earnings and diluted earnings per share (EPS) for the second quarter of 2002 with $75,518,000 (63% above last year) in net earnings and $1.10 per share (25% above last year). This compares to $46,466,000 in net earnings and EPS of $0.88 for the second quarter of 2001. The improvement was the result of increased sales, improved operating income and the Dal-Tile merger. Dal-Tile, which was acquired on March 20, 2002, results were included for the full quarter. The Dal-Tile results increased EPS by approximately $0.03 per share, after considering the effects of the merger. Net sales for the quarter increased 42% to $1,227,747,000 compared to $864,958,000 for the second quarter of 2001. The sales increase was attributable to the Dal-Tile merger and to internal growth of Mohawk products. The Mohawk segment net sales of $938,446,000 grew 8% because of growth in home products and residential products. The Dal-Tile segment net sales of $289,301,000 grew 9% (from $264,937,000) primarily from residential products.

EPS for the first half of 2002 was $1.91 or $118,728,000 in net earnings compared to $1.39 EPS or $73,672,000 in net earnings for first half of 2001. This improvement in EPS and earnings is attributable to sales and operating earnings growth in the Mohawk business and the merger of Dal-Tile. Net sales for the first half of 2002 were $2,094,457,000 representing a 28% increase from the first half 2001 sales of $1,642,297,000. This sales increase resulted from the Dal-Tile merger and internal growth.

In commenting on the second quarter results, Jeffrey S. Lorberbaum, President and CEO, stated, "We continue to report record performance in both sales and earnings as we assist our retailers in exceeding their customers' expectations. This success is the result of emphasis on strong product offerings, creative marketing programs, efficient operations in manufacturing and distribution and a strong balance sheet. The Dal-Tile merger has been a positive addition as we continue to increase sales and grow earnings.

"Our integration of the Dal-Tile merger is on schedule with Dal-Tile's financial systems fully converted to the Mohawk systems. We expect to complete the initial phase of the integration of the business to allow more efficient order entry and movement of product between the businesses during the second half. Detailed planning is well under way for longer term operation of sales, marketing, information systems and distribution. We continue to believe the Dal-Tile merger will be positive to earnings by about $0.10 EPS in 2002."

The company's debt to total capitalization ratio improved to 35.3% at the end of the second quarter 2002 compared to a 39.2% ratio at the end of the first quarter 2002 reflecting a reduction of approximately $130 million in debt during the quarter. This reduction in debt was generated from earnings and working capital reductions. The company continues to consider various investment alternatives for the future that it believes will improve the company's shareholder value. Acquisitions, stock repurchases and capital expenditures are some of the alternatives we are currently considering. Currently the company has 6.0 million shares open to repurchase from its 1999 authorization.

The total company second quarter gross profit percentage to net sales increased from 25.0% to 27.6% because of Dal-Tile's higher gross profit levels. The gross profit percentage for the Mohawk business declined slightly because of a timing difference between cost increases and the implementation of a price increase. The gross profit percentage for the Dal-Tile segment was up slightly when compared to second quarter 2001 due to improved operating efficiencies. The total company second quarter selling, general and administrative percentage (S.G. & A.) to net sales increased from 15.3% to 16.3% because of Dal-Tile's higher S.G. & A. levels. When Mohawk and Dal-Tile segments are compared to the second quarter of 2001 individually, both segments achieved a reduction in the S.G. & A. percentage as they were able to control operating costs as sales grew. Operating income as a percentage of sales increased from 9.7% to 11.3% for the second quarter because of the Dal- Tile merger, increased sales and reduced costs.

The level of uncertainty of future economic conditions has never been greater. We are currently seeing conflicting economic information. Some forecasters are projecting a continuing economic recovery and others believe the economy is slowing. We believe the current condition of the stock market will have an impact on people's attitudes and potentially on the overall economy. The latest survey indicates a reduction in consumer confidence also. The company's order rate has shown some softness in recent weeks but that could be a normal reaction of pre-buying from the price increase. Today we are less optimistic than we were last quarter. Historically Mohawk has had a limited visibility of future business with only two weeks of back log. At this time, based on a slowing economy, Mohawk anticipates that the third and fourth quarters 2002 EPS will be 2% to 5% above 2001. The total year 2002 EPS will be 15% to 17% above 2001. All of the above information includes the impact of Mohawk's merger with Dal-Tile. Despite this lower projection for the next two quarters (because of economic conditions) we are strongly encouraged by the integration of Mohawk and Dal-Tile. The company is firmly positioned for future growth and expansion as a total flooring company.

Certain of the statements in the immediately preceding paragraphs, particularly anticipating future financial performance, business prospects, growth and operating strategies, proposed acquisitions, and similar matters, and those preceded by, followed by or that otherwise include the words "believes," "expects," "anticipates," "intends," "estimates," or similar expressions constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. 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. Those statements are based on many assumptions, including assumptions regarding the Company's ability to maintain its sales growth and gross margins and to control costs. These or other assumptions could prove inaccurate and therefore, there can be no assurance that the "forward-looking statements" will prove to be accurate. Forward-looking statements involve a number of risks and uncertainties. The following important factors affect the future results of Mohawk and could cause those results to differ materially from those expressed in the forward-looking statements: materially adverse changes in economic conditions generally in the carpet, rug and floorcovering markets served by Mohawk; competition from other carpet, rug and floorcovering manufacturers; raw material prices; timing and level of capital expenditures; the successful integration of acquisitions including the challenges inherent in diverting Mohawk's management attention and resources from other strategic matters and from operational matters for an extended period of time; the successful introduction of new products; the successful rationalization of existing operations; and other risks identified from time to time in the Company's SEC reports and public announcements.

Mohawk is a leading supplier of flooring for both residential and commercial applications and a producer of woven and tufted broadloom carpet, rugs and ceramic tile. The Company designs, manufactures and markets premier carpet brand names, which include "Mohawk," "Aladdin," "Bigelow," "Custom Weave," "Durkan," "Galaxy," "Helios," "Horizon," "Karastan," "Mohawk Commercial," "World," and "Wunda Weve." Mohawk offers a broad line of home products including rugs, throws, pillows and bedspreads under the brand names Aladdin, Goodwin Weavers, Karastan, Mohawk Home and Newmark. Mohawk manufacturers and distributes ceramic tile and natural stone products under the brand names Dal-Tile, Mohawk and American Olean. Mohawk also offers other products that include laminate, wood and vinyl flooring and carpet padding under the Mohawk brand name.

There will be a conference call Tuesday, July 16, 2002 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 Sunday, July 21, 2002 by dialing 1-800-642-1687 and entering Conference ID # 4892088.

            DATES FOR FUTURE PRESS RELEASES AND CONFERENCE CALLS:

                    PRESS RELEASE  CONFERENCE CALL
    3rd QTR 2002    OCT. 14, 2002  OCT. 15, 2002  11:00 AM (800-603-9255)
    4th QTR 2002    FEB.  6, 2003  FEB.  7, 2003  11:00 AM (800-603-9255)
    1st QTR 2003    APR. 16, 2003  APR. 17, 2003  11:00 AM (800-603-9255)





    MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES
    Consolidated Statement of Earnings Data
    (Amounts in thousands, except per share data)


                                    Three Months Ended     Six months ended
                                    June 29,  June 30,   June 29,   June 30,
                                      2002      2001       2002       2001

    Net sales                      $1,227,747  864,958   2,094,457  1,642,297
    Cost of sales                     888,561  648,804   1,540,676  1,248,821
        Gross profit                  339,186  216,154     553,781    393,476
    Selling, general and
     administrative expenses          200,123  132,593     340,450    256,310
        Operating income              139,063   83,561     213,331    137,166
    Interest expense                   19,427    8,232      25,951     17,184
    Other (income) expense, net          (154)   1,574        (997)     3,043
        Earnings before income
         taxes                        119,790   73,755     188,377    116,939
    Income taxes                       44,272   27,289      69,649     43,267
        Net earnings                  $75,518   46,466     118,728     73,672
    Basic earnings per share            $1.12     0.89        1.95       1.41
    Weighted-average common shares
     outstanding                       67,485   52,266      60,870     52,314
    Diluted earnings per share          $1.10     0.88        1.91       1.39
    Weighted-average common and
     dilutive potential common
        shares outstanding             68,618   52,882      62,287     52,926

    Other Financial Information
    (Amounts in thousands)

    Depreciation & amortization       $28,968   21,076      50,476     42,019
    Capital expenditures              $31,214   14,950      47,241     26,647

    Consolidated Balance Sheet Data
    (Amounts in thousands)
                                                          June 29,   June 30,
                                                            2002       2001
    ASSETS
    Current assets:
        Receivables                                       $580,924    392,552
        Inventories                                        727,088    619,177
        Prepaid expenses                                    22,256     17,873
        Deferred income taxes                               83,056     66,474
            Total current assets                         1,413,324  1,096,076
    Property, plant and equipment,
     net                                                   841,651    635,558
    Goodwill                                             1,277,453    110,772
    Other assets                                           166,197      6,016
                                                        $3,698,625  1,848,422
    LIABILITIES AND STOCKHOLDERS'
     EQUITY
    Current liabilities:
        Current portion of long-
         term debt                                        $108,366    236,348
        Accounts payable and
         accrued expenses                                  634,207    392,560
            Total current
             liabilities                                   742,573    628,908
    Long-term debt, less current
     portion                                               912,384    319,456
    Deferred income taxes and
     other long-term liabilities                           175,326     76,589
            Total liabilities                            1,830,283  1,024,953
    Total stockholders' equity                           1,868,342    823,469
                                                        $3,698,625  1,848,422




                                    As of or for the    As of or for the Six
    Segment Information            Three Months Ended       Months Ended
    (Amounts in thousands)           June 29,  June 30,    June 29,  June 30,
                                       2002      2001        2002      2001

    Net sales:
      Mohawk                         $938,446  864,958   1,776,672  1,642,297
      Dal-Tile                        289,301    ---       317,785     ---
       Consolidated net sales      $1,227,747  864,958   2,094,457  1,642,297

    Operating income:
      Mohawk                          $96,263   85,000     167,529    139,934
      Dal-Tile                         44,506    ---        49,137     ---
      Corporate and eliminations       (1,706)  (1,439)     (3,335)    (2,768)
       Consolidated operating
        income                       $139,063   83,561     213,331    137,166

    Assets:
      Mohawk                                            $1,742,288  1,744,154
      Dal-Tile                                           1,824,871     ---
      Corporate and eliminations                           131,466    104,268
       Consolidated assets                              $3,698,625  1,848,422

CONTACT:
John D. Swift
Chief Financial Officer of Mohawk Industries, Inc.
1-706-624-2247

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