---

 

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): October 16, 2003 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 including zip code of principal executive offices) (706) 629-7721 (Registrant's telephone number, including area code)

---

Item  7.  Financial Statements, Pro Forma Financial Information and Exhibits.

C.    Exhibits

99.1 Press release dated October 16, 2003.

 

Item 12.  Results of Operations and Financial Condition.

On October 16, 2003, Mohawk Industries, Inc. issued a press release announcing its third quarter and nine months financial results. A copy of such press release is attached as Exhibit 99.1.

The information in this Form 8-K, including the exhibit attached thereto, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934,as amended, nor shall such information and exhibit 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 a filing.

 

 

 

 

---

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 duly authorized.

Mohawk Industries, Inc.

Date: October 16, 2003                                          By: /s/ FRANK H BOYKIN

Frank H. Boykin

VP & Corporate Controller

---

INDEX TO EXHIBITS

Exhibit

 

99.1.    Press release dated October 16, 2003

Exhibit 99.1

 

For Release:                         Immediately

 

Contact:                                John D. Swift, Chief Financial Officer

  

MOHAWK INDUSTRIES, INC. ANNOUNCES RECORD
QUARTERLY EARNINGS IN THIRD QUARTER

Calhoun, Georgia, October 16, 2003 - Mohawk Industries, Inc. (NYSE:MHK) today announced the highest quarterly net earnings in its history of $91,382,000 (12% above last year) and diluted earnings per share (EPS) of $1.36 (12% above last year) for the third quarter of 2003.  This compares to $81,560,000 in net earnings and $1.21 in EPS for the third quarter of 2002.  This improvement was the result of strong sales growth in the Dal-Tile segment, increased operating income and lower interest costs.  Net sales for the quarter increased 6% to $1,303,166,000 from $1,224,403,000 in 2002.  This increase was primarily the result of internal growth of both Mohawk and Dal-Tile products.  The Mohawk segment net sales of $967,405,000 in the third quarter of 2003 were up 4% from $927,299,000 due to improving sales across all product categories.  The Dal-Tile segment net sales of $335,761,000 in the third quarter of 2003 grew 13% from $297,104,000 primarily from internal growth.

Net earnings for the first nine months of 2003 were $208,007,000 (4% above last year), or $3.10 in EPS (1% below last year), compared to $200,288,000 in net earnings, or $3.13 in EPS, for the first nine months of 2002.  This improvement in net earnings is attributable to sales growth and operating earnings growth in the third quarter as well as the acquisition of Dal-Tile during the first quarter of 2002.  The reduction in EPS results from weak first quarter sales and higher raw material, energy and employee benefit costs during the period for the Mohawk segment.  Net sales for the first nine months increased 10% to $3,635,062,000 from $3,318,860,000.  This sales increase resulted primarily from the acquisition of Dal-Tile and hard surface internal growth.

In commenting on the third quarter results, Jeffrey S. Lorberbaum, President and CEO, stated, "The improvement in our third quarter was very encouraging and we believe somewhat indicative of the more optimistic outlook of most economists.  All of our product categories experienced positive revenue growth in the third quarter.  The Mohawk segment operating margin improved from 10.5% last year to 11.2%.  The Dal-Tile segment's reported operating income was $52,702,000, resulting in an operating margin of 15.7%.  Excluding the start up costs for the new Dal-Tile manufacturing facility (approximately $2,500,000), the Dal-Tile segment's operating income would have been $55,202,000, resulting in an operating margin of 16.4%, as compared to last year's operating margin of 15.8%.  The overall carpet industry is showing signs of improvement with the new home business continuing to lead other sectors within the carpet industry.   We believe the other segments of the floorcovering industry are also continuing to experience strong growth in new construction.

We were able to effectively manage our costs this quarter in spite of continuing high energy and raw material costs.  Price increases in carpet during the second quarter have improved our margins.  We have also controlled our general and administrative costs to lower levels. 

The acquisition of Lees Carpet continues on track to close in the fourth quarter of 2003.  We will integrate the financial and administrative systems into the Mohawk systems soon after closing.  Additionally, a team has been formed to consolidate the operating systems in 2004.  The Lees operation will continue under their existing management to focus on the unique product benefits that add value to their customers.  All functional groups are developing strategies to maximize the combined value we bring to our customers.  Our balance sheet is very strong with 26.5% debt to capitalization excluding $16,000,000 of cash on the balance sheet at the end of the current quarter.  The current available bank line of $700,000,000 will more than cover the approximate $352,000,000 needed for the Lees Carpet acquisition.  We believe the acquisition will be slightly accretive in 2004."

---

Currently the company does see improving trends in the carpet industry and continued growth in the hard surface products, but there is still some uncertainty as consumer confidence trends and employment statistics continue to be lackluster.  After considering these factors, the fourth quarter earnings forecast range is from $1.32 to $1.40 EPS.

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," "forecast," "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," "Karastan," "Aladdin," "Bigelow," "Custom Weave," "Durkan," "Galaxy," "Helios," "Horizon," "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 manufactures 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 Friday, October 17, 2003 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, October 24, 2003 by dialing 1-800-642-1687

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

Conference ID # 3374137.

DATES FOR FUTURE PRESS RELEASES AND CONFERENCE CALLS:

	PRESS RELEASE	CONFERENCE CALL
4th QUARTER 2003	FEBRUARY 5, 2004	FEBRUARY 6, 2004	11:00 AM (800-603-9255)
1st QUARTER 2004	APRIL 21, 2004	APRIL 22, 2004	11:00AM  (800-603-9255)
2nd QUARTER 2004	JULY 21, 2004	JULY 22, 2004	11:00AM (800-603-9255)
3rd QUARTER 2004	OCTOBER 21, 2004	OCTOBER 22, 2004	11:00AM (800-603-9255)

---