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): April 15, 2002 MOHAWK INDUSTRIES, INC. (Exact name of registrant as specified in its charter) Delaware 01-19826 52-1604305 - --------------- ---------------- ------------- (State or other (Commission File (IRS Employer Jurisdiction of Number) Identification No.) Incorporation) 160 South Industrial Blvd., Calhoun, Georgia 30701 ------------------------------------------------------------------------ (Address, including zip code, of principal executive offices) (706) 629-7721 ------------------------------------------------------------------------ (Registrant's telephone number, including area code)
Item 5. Other Events ------------ On April 15, 2002, Mohawk Industries, Inc. ("Mohawk") issued a press release announcing earnings for the first quarter ended March 30, 2002. A copy of such press release is included as an exhibit to this report and is incorporated herein by reference under this Item 5. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. ------------------------------------------------------------------- C. Exhibits 99.1 Press Release dated April 15, 2002
SIGNATURE 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: April 15, 2002 By: /s/ Frank H. Boykin -------------------------- Frank H. Boykin VP & Corporate Controller
INDEX TO EXHIBITS ----------------- Exhibit - ------- 99.1 Press Release dated April 15, 2002
Exhibit 99.1 For Release: Immediately Contact: John D. Swift, Chief Financial Officer MOHAWK INDUSTRIES, INC. ANNOUNCES RECORD FIRST QUARTER EARNINGS WITH A 59% INCREASE IN NET EARNINGS Calhoun, Georgia, April 15, 2002 - Mohawk Industries, Inc. (NYSE:MHK) today announced record net earnings and diluted earnings per share (EPS) for the first quarter of 2002 with $43,210,000 (59% above last year) in net earnings and $0.77 per share (51% above last year). This compares to $27,206,000 in net earnings and EPS of $0.51 for the first quarter of 2001. The improvement was the result of increased sales, improved gross profit, and reduced interest expense. Dal-Tile results were included for the seven business days after the closing on March 20, 2002. The Dal-Tile results and related acquisition costs had no material impact on EPS. Net sales for the quarter increased 12% to $866,710,000 compared to $777,339,000 for the first quarter of 2001. The sales increase was attributable to internal growth of Mohawk products and the Dal-Tile acquisition. In commenting on the first quarter financials, Jeffrey S. Lorberbaum, President and CEO, stated, "We are pleased with our performance this quarter and believe these results along with those from the previous quarter indicate we are on the upside of an economic recovery. Our sales growth was the result of internal growth of 8% in our various product lines and the addition of Dal-Tile sales of $28,484,000. Gross profit as a percentage of net sales improved from 22.8% to 24.8% because of improvement in Mohawk product mix and costs (1.5%) and the impact of Dal-Tile (.5%). The selling, general and administrative expenses rose slightly as a percentage of net sales primarily as a result of the Dal-Tile operations. Overall, operating income as a percentage of net sales increased from 6.9% to 8.6%. This increase is mostly related to Mohawk operations. Our debt to total capitalization ratio was 39.2% at the end of the first quarter 2002 even after the Dal-Tile merger. This compares to a 42.8% ratio at the end of first quarter 2001 and this reduction clearly demonstrates our commitment to maintaining an investment grade rating and managing the balance sheet for financial flexibility. Our integration of the Dal-Tile acquisition continues as planned. We are especially encouraged by the very positive attitude and actions of the Dal-Tile and Mohawk integration teams. We have developed preliminary strategies that will allow us to
grow earnings and cash flow thereby adding greater value for our shareholders. We continue to believe the Dal-Tile acquisition will be slightly positive for earnings by about $0.10 EPS in 2002. We were pleased to be named number 455 in the list of the Fortune 500 Largest U.S. Corporations in 2001 which was an improvement from number 491 in 2000. Additionally, we were ranked number 17 out of the top 500 for the total return to shareholders for one year, and number 18 out of the top 500 for growth in profits over five years. We were also honored to receive Floor Covering Weekly Dealers' Choice first place award at Surfaces 2002 for carpet, ceramic, wood and merchandising." Although we believe that our industry is recovering from the economic recession and are cautiously optimistic about future quarters, the current environment of rising energy prices could have a dampening effect on the economy overall as well as our industry. Additionally, the potential for increasing interest rates could also negatively impact our future results. At this time, Mohawk anticipates that the second quarter 2002 EPS will be 20% to 25% above 2001 and third quarter 2002 EPS will be 10% to 15% above last year. All of the above information includes the impact of Mohawk's merger with Dal-Tile. 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, April 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 Friday, April 19, 2002 by dialing 1-800-642-1687 and - ---------------------------------------------------------------------------- entering Conference ID # 3841403. - --------------------------------- ##### DATES FOR FUTURE PRESS RELEASES AND CONFERENCE CALLS: - ----------------------------------------------------- PRESS RELEASE CONFERENCE CALL ------------- --------------- 1/ST/ QUARTER 2002 APRIL 15, 2002 APRIL 16, 2002 11:00 AM (800-603-9255) 2/ND/ QUARTER 2002 JULY 15, 2002 JULY 16, 2002 11:00 AM (800-603-9255) 3/RD/ QUARTER 2002 OCTOBER 14, 2002 OCTOBER 15, 2002 11:00 AM (800-603-9255) 4/TH/ QUARTER 2002 FEBRUARY 6, 2003 FEBRUARY 7, 2003 11:00 AM (800-603-9255)
MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES Three Months Ended -------------------------------------- March 30, 2002 March 31, 2001 -------------- -------------- Consolidated Statement of Earnings Data (Amounts in thousands, except per share data) Net sales $ 866,710 777,339 Cost of sales 652,115 600,017 - ------------------------------------------------------------------------------------------------ Gross profit 214,595 177,322 Selling, general and administrative expenses 140,327 123,717 - ------------------------------------------------------------------------------------------------ Operating income 74,268 53,605 Interest expense 6,524 8,952 Other expense, net (843) 1,469 - ------------------------------------------------------------------------------------------------ Earnings before income taxes 68,587 43,184 Income taxes 25,377 15,978 - ------------------------------------------------------------------------------------------------ Net earnings $ 43,210 27,206 - ------------------------------------------------------------------------------------------------ Basic earnings per share $ 0.80 0.52 - ------------------------------------------------------------------------------------------------ Weighted-average common shares outstanding 54,256 52,361 - ------------------------------------------------------------------------------------------------ Diluted earnings per share $ 0.77 0.51 - ------------------------------------------------------------------------------------------------ Weighted-average common and dilutive potential common shares outstanding 55,956 52,970 ================================================================================================ Consolidated Balance Sheet Data (Amounts in thousands) March 30, 2002 March 31, 2001 -------------- -------------- ASSETS Current assets: Receivables $ 619,270 389,042 Inventories 699,789 621,308 Prepaid expenses 31,657 21,818 Deferred income taxes 70,058 66,474 - ------------------------------------------------------------------------------------------------ Total current assets 1,420,774 1,098,642 Property, plant and equipment, net 837,167 641,669 Goodwill, net 1,277,458 111,574 Other assets 161,640 6,396 - ------------------------------------------------------------------------------------------------ $ 3,697,039 1,858,281 ================================================================================================ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $ 253,366 203,635 Accounts payable and accrued expenses 585,840 422,756 - ------------------------------------------------------------------------------------------------ Total current liabilities 839,206 626,391 Long-term debt, less current portion 897,831 378,310 Deferred income taxes and other long-term liabilities 172,255 75,946 - ------------------------------------------------------------------------------------------------ Total liabilities 1,909,292 1,080,647 - ------------------------------------------------------------------------------------------------ Total stockholders' equity 1,787,747 777,634 - ------------------------------------------------------------------------------------------------ $ 3,697,039 1,858,281 ================================================================================================ Segment Information As of or for the Three Months Ended (Amounts in thousands) -------------------------------------- March 30, 2002 March 31, 2001 -------------- -------------- Net sales: Carpet and Rug $ 838,226 777,339 Ceramic Tile 28,484 - - ------------------------------------------------------------------------------------------------ Consolidated net sales $ 866,710 777,339 ================================================================================================ Operating income: Carpet and Rug $ 71,267 54,834 Ceramic Tile 4,630 - Corporate and eliminations (1,629) (1,229) - ------------------------------------------------------------------------------------------------ Consolidated operating income $ 74,268 53,605 ================================================================================================ Depreciation and amortization: Carpet and Rug $ 20,853 20,943 Ceramic Tile 755 - - ------------------------------------------------------------------------------------------------ Consolidated depreciation and amortization $ 21,608 20,943 ================================================================================================ Capital expenditures (excluding acquisitions): Carpet and Rug $ 16,027 11,697 Ceramic Tile - - - ------------------------------------------------------------------------------------------------ Consolidated capital expenditures $ 16,027 11,697 ================================================================================================ Assets: Carpet and Rug $ 1,722,898 1,753,657 Ceramic Tile 1,866,703 - Corporate and eliminations 107,438 104,624 - ------------------------------------------------------------------------------------------------ Consolidated assets $ 3,697,039 1,858,281 ================================================================================================