CALHOUN, Ga., July 27, 2017 /CNW/ -- Mohawk Industries, Inc.
(NYSE: MHK) today announced 2017 second quarter record operating
income of $356 million, net earnings
of $261 million and diluted earnings
per share (EPS) of $3.48. Excluding
restructuring, acquisition and other charges, net earnings were
$278 million and EPS was $3.72, a 7% increase over last year's second
quarter adjusted EPS. Net sales for the second quarter of 2017 were
$2.5 billion, up 6% versus the prior
year's second quarter or an increase of approximately 8% on a
constant days and currency basis. For the second quarter of 2016,
net sales were $2.3 billion,
operating income was $351 million,
net earnings were $255 million and
EPS was $3.42; excluding
restructuring, acquisition and other charges, net earnings were
$259 million and EPS was $3.47.
For the six months ending July 1,
2017, net earnings and EPS were $461
million and $6.17,
respectively. Net earnings excluding restructuring, acquisition and
other charges were $482 million and
EPS was $6.44, an increase of 10%
over the 2016 six-month period adjusted EPS. For the six-month
period, net sales were $4.7 billion,
an increase of 4% versus prior year as reported or 6% on a constant
days and currency basis. For the six-month period ending
July 2, 2016, net sales were
$4.5 billion, net earnings were
$427 million and EPS was $5.73; excluding restructuring, acquisition and
other charges, net earnings and EPS were $436 million and $5.85.
Commenting on Mohawk Industries' second quarter performance,
Jeffrey S. Lorberbaum, Chairman and
CEO, stated, "During the period, Mohawk delivered record results,
generating the highest sales, adjusted operating income and
adjusted EPS in the company's history. Adjusted operating income
increased to $381 million, up 7%,
overcoming higher material and start-up costs and a reduction of IP
income. Across the business, we are increasing prices to offset
inflation, introducing innovative products and improving our
productivity.
"During the period, we completed the acquisition of two small
ceramic manufacturers to expand our European platform and two U.S.
material manufacturing operations to enhance the vertical
integration of our businesses. This year, we are increasing our
internal investments to over $850
million to capitalize on innovative new products, increased
automation and greater efficiencies, as well as to enhance the four
acquisitions. As detailed last quarter, we are expanding our sales
capacity by approximately $1.4
billion. This production will come online over the next
twelve months, and our start-up costs will be higher until we have
optimized all our new manufacturing operations later in 2018. These
initiatives will increase our sales and profitability, maximizing
the long-term value of our business.
"For the quarter, our Global Ceramic Segment sales increased
approximately 9% as reported and on a constant days and currency
basis. Operating margin was 17% as reported and 18% on an adjusted
basis, with adjusted operating income rising approximately 16% for
the quarter. We completed two European ceramic acquisitions that
increased our segment sales by 6% during the period. Our legacy
business improved from the prior quarter but was limited in
North America by capacity
constraints in red body ceramic and in Europe by a temporary plant shutdown to
upgrade our technical production. In Europe, half of our new technical equipment
has begun production and is operating at expected levels, and we
are importing product to satisfy U.S. demand until our Mexican
expansion becomes operational later this year. We are introducing
higher value products from our new Tennessee plant, including longer,
more-realistic wood visuals; surface textures in registration with
our designs; and proprietary slip resistant surfaces. During the
quarter, we completed the acquisition of a talc mine in
Texas that will ensure our
material supply and enhance our competitive position. Even with our
capacity restraints, our sales in Mexico outpaced the strong local market. Our
European ceramic business grew substantially as a result of our new
acquisitions and new products we have introduced. Our Russian
ceramic business is significantly outperforming the market, with
sales and margins improving as a result of our unique styling,
strong brand and robust distribution. Russia's economy has expanded the last two
quarters, and we are increasing our capacity to support future
growth.
"During the quarter, our Flooring North America Segment's sales
increased 6% as reported. Operating margin for the quarter was 12%
as reported and 13% on an adjusted basis, with adjusted operating
income rising 12%. For the period, our hard surface sales outpaced
carpet, and residential sales were stronger than commercial. We
have implemented price increases and improved our product mix,
which together have offset material and other inflation. We are
executing productivity initiatives across our operations, resulting
in improved efficiencies and yields. Our premium residential carpet
collections are growing faster than the market due to increasing
consumer preference for the superior softness and performance of
our exclusive SmartStrand franchise. We have begun shipping
SmartStrand Silk Reserve, the fourth generation of our proprietary
fiber, with an even greater level of softness. During the period,
we completed the purchase of a nylon polymerization plant, which we
are enhancing to improve our competitive position. Our Main Street
commercial sales expanded faster than our specified channels, with
carpet tile continuing to gain share. Our LVT and laminate sales
outpaced our other hard surfaces, with our distribution expanding
as a result of our leading design and performance attributes. Our
LVT operations are improving, and construction is progressing on
our new rigid LVT line, which will start up by the end of this
year. Our propriety water resistant laminate with enhanced visuals
is growing as an alternative to wood, and we are increasing our
capacity later this year to support additional growth.
"For the quarter, our Flooring Rest of the World Segment's sales
increased 2% as reported and 8.5% on a constant days and currency
basis. Operating margin was 17% as reported and on an adjusted
basis, with adjusted operating income decreasing approximately 12%
for the quarter. The segment was impacted by increasing material
costs and currency changes, which we are implementing price
increases to recover, and the reduction in patent income. We
anticipate that the majority of the price increases will be fully
implemented by the fourth quarter, allowing us to recover our
higher costs. Our LVT sales are growing significantly, although we
are reaching the limits of our present capacity. Our new LVT
production line in Belgium will
produce both rigid and flexible products and should start-up in the
fourth quarter. In Russia, we are
finalizing the purchase of a building near our ceramic facilities
to house our new sheet vinyl manufacturing operation. In
Europe, our premium laminate
collections grew substantially, and we have begun installation of a
new laminate press line to further expand our business and improve
our product mix with value-added introductions. Construction of our
new carpet tile plant is underway, and we will begin limited
operations in the fourth quarter.
"Mohawk's operating performance in the third quarter should
continue to significantly improve, with sales and income
strengthening further, even with higher material inflation and
changes in patents. We are implementing price increases across most
product categories and regions to recover material and currency
changes in the third quarter. We will continue optimizing the
acquisitions we completed in the second quarter by improving their
strategies and enhancing their profitability. Taking all of this
into account, our adjusted EPS guidance for the third quarter is
$3.70 to $3.79.
"To enhance our long-term performance, we are investing at
record levels this year to expand our product offering and
capacity, improve our efficiencies and extend our geographic reach.
In the fourth quarter, we will incur higher start-up costs as our
production expansions ramp up and we elevate our marketing
activities to increase our sales. The expansion of our LVT,
ceramic, laminate, sheet vinyl and carpet tile capacity will
increase our future growth and profitability, strengthening our
position as the global leader in flooring."
ABOUT MOHAWK INDUSTRIES
Mohawk Industries is the leading global flooring manufacturer
that creates products to enhance residential and commercial spaces
around the world. Mohawk's vertically integrated manufacturing and
distribution processes provide competitive advantages in the
production of carpet, rugs, ceramic tile, laminate, wood, stone and
vinyl flooring. Our industry-leading innovation has yielded
products and technologies that differentiate our brands in the
marketplace and satisfy all remodeling and new construction
requirements. Our brands are among the most recognized in the
industry and include American Olean, Daltile, Durkan, IVC,
Karastan, Marazzi, Mohawk, Mohawk Group, Pergo, Quick-Step and
Unilin. During the past decade, Mohawk has transformed its business
from an American carpet manufacturer into the world's largest
flooring company with operations in Australia, Brazil, Canada, Europe, India, Malaysia, Mexico, New
Zealand, Russia and
the United States.
Certain of the statements in the immediately preceding
paragraphs, particularly anticipating future performance, business
prospects, growth and operating strategies and similar matters and
those that include the words "could," "should," "believes,"
"anticipates," "expects," and "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; inflation
and deflation in raw material prices and other input costs;
inflation and deflation in consumer markets; energy costs and
supply; timing and level of capital expenditures; timing and
implementation of price increases for the Company's products;
impairment charges; integration of acquisitions; international
operations; introduction of new products; rationalization of
operations; tax, product and other claims; litigation; and other
risks identified in Mohawk's SEC reports and public
announcements.
Conference call Friday, July 28,
2017, at 11:00 AM Eastern
Time
The telephone number is 1-800-603-9255 for US/Canada and 1-706-634-2294 for
International/Local. Conference ID # 51858547. A replay will be
available until Friday, August 25,
2017, by dialing 1-855-859-2056 for US/local calls and
1-404-537-3406 for International/Local calls and entering
Conference ID # 51858547.
MOHAWK INDUSTRIES,
INC. AND SUBSIDIARIES
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
Consolidated
Statement of Operations Data
|
|
Three Months
Ended
|
|
Six Months
Ended
|
(Amounts in
thousands, except per share data)
|
|
July 1,
2017
|
|
July 2,
2016
|
|
July 1,
2017
|
|
July 2,
2016
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
2,453,038
|
|
2,310,336
|
|
4,673,683
|
|
4,482,382
|
Cost of
sales
|
|
1,673,902
|
|
1,554,748
|
|
3,214,194
|
|
3,087,115
|
Gross profit
|
|
779,136
|
|
755,588
|
|
1,459,489
|
|
1,395,267
|
Selling, general and
administrative expenses
|
|
423,311
|
|
404,896
|
|
828,880
|
|
798,903
|
Operating
income
|
|
355,825
|
|
350,692
|
|
630,609
|
|
596,364
|
Interest
expense
|
|
8,393
|
|
10,351
|
|
16,595
|
|
22,652
|
Other expense
(income), net
|
|
3,002
|
|
(5,807)
|
|
170
|
|
(2,378)
|
Earnings before income taxes
|
|
344,430
|
|
346,148
|
|
613,844
|
|
576,090
|
Income tax
expense
|
|
82,682
|
|
90,034
|
|
151,040
|
|
147,859
|
Net
earnings including noncontrolling interest
|
|
261,748
|
|
256,114
|
|
462,804
|
|
428,231
|
Net earnings
attributable to noncontrolling interest
|
|
1,067
|
|
926
|
|
1,569
|
|
1,495
|
Net earnings
attributable to Mohawk Industries, Inc.
|
|
$
260,681
|
|
255,188
|
|
461,235
|
|
426,736
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share attributable to Mohawk Industries, Inc.
|
|
|
|
|
|
|
|
|
Basic earnings per
share attributable to Mohawk Industries, Inc.
|
|
$
3.51
|
|
3.44
|
|
6.21
|
|
5.76
|
Weighted-average
common shares outstanding - basic
|
|
74,327
|
|
74,123
|
|
74,269
|
|
74,049
|
|
|
|
|
|
|
|
|
|
Diluted earnings
per share attributable to Mohawk Industries, Inc.
|
|
|
|
|
|
|
|
|
Diluted earnings per
share attributable to Mohawk Industries, Inc.
|
|
$
3.48
|
|
3.42
|
|
6.17
|
|
5.73
|
Weighted-average
common shares outstanding - diluted
|
|
74,801
|
|
74,574
|
|
74,773
|
|
74,526
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Financial
Information
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
$
109,761
|
|
101,215
|
|
214,785
|
|
201,408
|
Capital
expenditures
|
|
$
224,153
|
|
136,081
|
|
425,423
|
|
276,914
|
|
|
|
|
|
|
|
|
|
Consolidated
Balance Sheet Data
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
July 1,
2017
|
|
July 2,
2016
|
ASSETS
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
|
$
130,238
|
|
112,049
|
Receivables, net
|
|
|
|
|
|
1,639,614
|
|
1,448,898
|
Inventories
|
|
|
|
|
|
1,865,941
|
|
1,660,131
|
Prepaid expenses and other current assets
|
|
|
|
|
|
374,930
|
|
298,125
|
Total
current assets
|
|
|
|
|
|
4,010,723
|
|
3,519,203
|
Property, plant and
equipment, net
|
|
|
|
|
|
3,892,251
|
|
3,243,838
|
Goodwill
|
|
|
|
|
|
2,417,058
|
|
2,322,735
|
Intangible assets,
net
|
|
|
|
|
|
878,301
|
|
930,323
|
Deferred income taxes
and other non-current assets
|
|
|
|
|
|
391,158
|
|
296,732
|
Total assets
|
|
|
|
|
|
$
11,589,491
|
|
10,312,831
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Current portion of
long-term debt and commercial paper
|
|
|
|
|
|
$
1,754,077
|
|
1,795,584
|
Accounts payable and
accrued expenses
|
|
|
|
|
|
1,466,658
|
|
1,334,150
|
Total
current liabilities
|
|
|
|
|
|
3,220,735
|
|
3,129,734
|
Long-term debt, less
current portion
|
|
|
|
|
|
1,174,440
|
|
1,160,700
|
Deferred income taxes
and other long-term liabilities
|
|
|
|
|
|
713,110
|
|
613,131
|
Total
liabilities
|
|
|
|
|
|
5,108,285
|
|
4,903,565
|
Redeemable
noncontrolling interest
|
|
|
|
|
|
26,713
|
|
23,683
|
Total stockholders'
equity
|
|
|
|
|
|
6,454,493
|
|
5,385,583
|
Total liabilities and stockholders' equity
|
|
|
|
|
|
$
11,589,491
|
|
10,312,831
|
|
|
|
|
|
|
|
|
|
Segment
Information
|
|
As of or for the
Three Months Ended
|
|
As of or for the Six
Months Ended
|
(Amounts in
thousands)
|
|
July 1,
2017
|
|
July 2,
2016
|
|
July 1,
2017
|
|
July 2,
2016
|
|
|
|
|
|
|
|
|
|
Net sales:
|
|
|
|
|
|
|
|
|
Global Ceramic
|
|
$
902,670
|
|
829,794
|
|
1,687,639
|
|
1,603,520
|
Flooring NA
|
|
1,040,299
|
|
980,693
|
|
1,979,795
|
|
1,887,057
|
Flooring ROW
|
|
510,069
|
|
499,849
|
|
1,006,249
|
|
991,805
|
Intersegment sales
|
|
-
|
|
-
|
|
-
|
|
-
|
Consolidated net sales
|
|
$
2,453,038
|
|
2,310,336
|
|
4,673,683
|
|
4,482,382
|
|
|
|
|
|
|
|
|
|
Operating income
(loss):
|
|
|
|
|
|
|
|
|
Global Ceramic
|
|
$
152,557
|
|
140,606
|
|
268,593
|
|
240,383
|
Flooring NA
|
|
127,482
|
|
118,946
|
|
219,624
|
|
194,297
|
Flooring ROW
|
|
86,052
|
|
101,062
|
|
162,147
|
|
180,599
|
Corporate and eliminations
|
|
(10,266)
|
|
(9,922)
|
|
(19,755)
|
|
(18,915)
|
Consolidated operating income
|
|
$
355,825
|
|
350,692
|
|
630,609
|
|
596,364
|
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
Global Ceramic
|
|
|
|
|
|
$
4,736,068
|
|
4,054,351
|
Flooring NA
|
|
|
|
|
|
3,625,350
|
|
3,316,048
|
Flooring ROW
|
|
|
|
|
|
2,984,716
|
|
2,835,497
|
Corporate and eliminations
|
|
|
|
|
|
243,357
|
|
106,935
|
Consolidated assets
|
|
|
|
|
|
$
11,589,491
|
|
10,312,831
|
Reconciliation of
Net Earnings Attributable to Mohawk Industries, Inc. to Adjusted
Net Earnings Attributable to Mohawk Industries, Inc. and Adjusted
Diluted Earnings Per Share Attributable to Mohawk Industries,
Inc.
|
(Amounts in
thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
|
|
|
|
July 1,
2017
|
|
July 2,
2016
|
|
July 1,
2017
|
|
July 2,
2016
|
Net earnings
attributable to Mohawk Industries, Inc.
|
|
|
|
$
260,681
|
|
255,188
|
|
461,235
|
|
426,736
|
Adjusting
items:
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related and other
costs
|
|
15,878
|
|
6,020
|
|
19,856
|
|
13,738
|
Acquisitions purchase
accounting (inventory step-up)
|
|
|
|
9,571
|
|
-
|
|
9,763
|
|
-
|
Income
taxes
|
|
|
|
|
|
(7,677)
|
|
(2,342)
|
|
(9,091)
|
|
(4,620)
|
Adjusted net earnings attributable
to Mohawk Industries, Inc.
|
|
|
|
$
278,453
|
|
258,866
|
|
481,763
|
|
435,854
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted diluted
earnings per share attributable to Mohawk Industries,
Inc.
|
|
$
3.72
|
|
3.47
|
|
6.44
|
|
5.85
|
Weighted-average
common shares outstanding - diluted
|
|
|
|
74,801
|
|
74,574
|
|
74,773
|
|
74,526
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Total Debt to Net Debt
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
July 1,
2017
|
|
Current portion of
long-term debt and commercial paper
|
|
$
1,754,077
|
|
Long-term debt, less
current portion
|
|
|
1,174,440
|
|
Less: Cash and cash
equivalents
|
|
|
130,238
|
|
Net Debt
|
|
|
|
$
2,798,279
|
|
Reconciliation of
Operating Income to Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Trailing
Twelve
|
|
|
|
|
Three Months
Ended
|
|
Months
Ended
|
|
|
|
|
October 1,
2016
|
|
December 31,
2016
|
|
April 1,
2017
|
|
July 1,
2017
|
|
July 1,
2017
|
Operating
income
|
|
|
|
$
378,307
|
|
305,272
|
|
274,784
|
|
355,825
|
|
1,314,188
|
Other (expense)
income
|
|
|
(3,839)
|
|
3,190
|
|
2,832
|
|
(3,002)
|
|
(819)
|
Net (earnings) loss
attributable to non-controlling interest
|
|
(949)
|
|
(760)
|
|
(502)
|
|
(1,067)
|
|
(3,278)
|
Depreciation and
amortization
|
|
|
103,680
|
|
104,379
|
|
105,024
|
|
109,761
|
|
422,844
|
EBITDA
|
|
|
|
477,199
|
|
412,081
|
|
382,138
|
|
461,517
|
|
1,732,935
|
Restructuring,
acquisition and integration-related and other
costs
|
|
30,572
|
|
16,214
|
|
3,978
|
|
15,878
|
|
66,642
|
Acquisitions purchase
accounting (inventory step-up)
|
|
-
|
|
-
|
|
192
|
|
9,571
|
|
9,763
|
Legal settlement and
reserves
|
|
|
(90,000)
|
|
-
|
|
-
|
|
-
|
|
(90,000)
|
Release of
indemnification asset
|
|
|
2,368
|
|
3,004
|
|
-
|
|
-
|
|
5,372
|
Tradename
impairment
|
|
|
|
47,905
|
|
-
|
|
-
|
|
-
|
|
47,905
|
Adjusted
EBITDA
|
|
|
|
$
468,044
|
|
431,299
|
|
386,308
|
|
486,966
|
|
1,772,617
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Debt to
Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
1.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net Sales to Net Sales on a Constant Exchange Rate and Constant
Shipping Days Excluding Acquisition Volume
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
|
|
|
|
July 1,
2017
|
|
July 2,
2016
|
|
July 1,
2017
|
|
July 2,
2016
|
|
|
Net sales
|
|
|
|
$
2,453,038
|
|
2,310,336
|
|
4,673,683
|
|
4,482,382
|
|
|
Adjustment to net
sales on constant shipping days
|
|
23,317
|
|
-
|
|
35,247
|
|
-
|
|
|
Adjustment to net
sales on a constant exchange rate
|
|
12,356
|
|
-
|
|
30,535
|
|
-
|
|
|
Net sales on a
constant exchange rate and constant shipping days
|
|
2,488,711
|
|
2,310,336
|
|
4,739,465
|
|
4,482,382
|
|
|
Less: impact of
acquisition volume
|
|
(48,224)
|
|
-
|
|
(48,224)
|
|
-
|
|
|
Net sales on a
constant exchange rate and constant shipping days excluding
acquisition volume
|
$
2,440,487
|
|
2,310,336
|
|
4,691,241
|
|
4,482,382
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment Net Sales to Segment Net Sales on a Constant Exchange Rate
and Constant Shipping Days Excluding Acquisition
Volume
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
Global
Ceramic
|
|
|
|
July 1,
2017
|
|
July 2,
2016
|
|
Net sales
|
|
|
|
$
902,670
|
|
829,794
|
|
Adjustment to net
sales on constant shipping days
|
|
6,163
|
|
-
|
|
Adjustment to segment
net sales on a constant exchange rate
|
|
(2,542)
|
|
-
|
|
Segment net sales on
a constant exchange rate and constant shipping
days
|
|
906,291
|
|
829,794
|
|
Less: impact of
acquisition volume
|
|
|
(48,224)
|
|
-
|
|
Segment net sales on
a constant exchange rate and constant shipping days excluding
acquisition volume
|
$
858,067
|
|
829,794
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment Net Sales to Segment Net Sales on a Constant Exchange Rate
and Constant Shipping Days
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Flooring
ROW
|
|
|
|
July 1,
2017
|
|
July 2,
2016
|
|
Net sales
|
|
|
|
$
510,069
|
|
499,849
|
|
Adjustment to net
sales on constant shipping days
|
|
17,154
|
|
-
|
|
Adjustment to segment
net sales on a constant exchange rate
|
|
14,897
|
|
-
|
|
Segment net sales on
a constant exchange rate and constant shipping
days
|
|
$
542,120
|
|
499,849
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Gross Profit to Adjusted Gross Profit
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
July 1,
2017
|
|
July 2,
2016
|
|
Gross
Profit
|
|
|
|
$
779,136
|
|
755,588
|
|
Adjustments to gross
profit:
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related and other
costs
|
|
13,028
|
|
2,778
|
|
Acquisitions purchase
accounting (inventory step-up)
|
|
9,571
|
|
-
|
|
Adjusted gross
profit
|
|
|
|
$
801,735
|
|
758,366
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Selling, General and Administrative Expenses to Adjusted Selling,
General and Administrative Expenses
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
July 1,
2017
|
|
July 2,
2016
|
|
Selling, general and
administrative expenses
|
|
$
423,311
|
|
404,896
|
|
Adjustments to
selling, general and administrative expenses:
|
|
|
|
|
|
Restructuring,
acquisition and integration-related and other
costs
|
|
(2,850)
|
|
(3,241)
|
|
Adjusted
selling, general and administrative expenses
|
|
$
420,461
|
|
401,655
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Operating Income to Adjusted Operating Income
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
July 1,
2017
|
|
July 2,
2016
|
|
Operating
income
|
|
|
|
$
355,825
|
|
350,692
|
|
Adjustments to
operating income:
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related and other
costs
|
|
15,878
|
|
6,020
|
|
Acquisitions purchase
accounting (inventory step-up)
|
|
9,571
|
|
-
|
|
Adjusted operating
income
|
|
|
|
$
381,274
|
|
356,712
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment Operating Income to Adjusted Segment Operating
Income
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Global
Ceramic
|
|
|
|
July 1,
2017
|
|
July 2,
2016
|
|
Operating
income
|
|
|
|
$
152,557
|
|
140,606
|
|
Adjustments to
segment operating income:
|
|
|
|
|
|
Restructuring,
acquisition and integration-related and other
costs
|
|
1,305
|
|
381
|
|
Acquisitions purchase
accounting (inventory step-up)
|
|
9,571
|
|
-
|
|
Adjusted segment
operating income
|
|
|
$
163,433
|
|
140,987
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment Operating Income to Adjusted Segment Operating
Income
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Flooring
NA
|
|
|
|
July 1,
2017
|
|
July 2,
2016
|
|
Operating
income
|
|
|
|
$
127,482
|
|
118,946
|
|
Adjustments to
segment operating income:
|
|
|
|
|
|
Restructuring,
acquisition and integration-related and other
costs
|
|
12,196
|
|
6,146
|
|
Adjusted
segment operating income
|
|
|
$
139,678
|
|
125,092
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment Operating Income to Adjusted Segment Operating
Income
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Flooring
ROW
|
|
|
|
July 1,
2017
|
|
July 2,
2016
|
|
Operating
income
|
|
|
|
$
86,052
|
|
101,062
|
|
Adjustments to
segment operating income:
|
|
|
|
|
|
Restructuring,
acquisition and integration-related and other
costs
|
|
2,170
|
|
(507)
|
|
Adjusted segment
operating income
|
|
|
$
88,222
|
|
100,555
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Earnings including Noncontrolling Interests Before Income Taxes to
Adjusted Earnings including Noncontrolling Interests Before Income
Taxes
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
July 1,
2017
|
|
July 2,
2016
|
|
Earnings before
income taxes
|
|
|
$
344,430
|
|
346,148
|
|
Noncontrolling
interests
|
|
|
|
(1,067)
|
|
(926)
|
|
Adjustments to
earnings including noncontrolling interests before income
taxes:
|
|
|
|
|
|
Restructuring,
acquisition and integration-related & other
costs
|
|
15,878
|
|
6,020
|
|
Acquisitions purchase
accounting (inventory step-up)
|
|
9,571
|
|
-
|
|
Adjusted
earnings including noncontrolling interests before income
taxes
|
|
$
368,812
|
|
351,242
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Income Tax Expense to Adjusted Income Tax
Expense
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
July 1,
2017
|
|
July 2,
2016
|
|
Income tax
expense
|
|
|
|
$
82,682
|
|
90,034
|
|
Income tax effect of
adjusting items
|
|
|
|
7,677
|
|
2,342
|
|
Adjusted
income tax expense
|
|
|
$
90,359
|
|
92,376
|
|
|
|
|
|
|
|
|
|
Adjusted income tax
rate
|
|
|
|
24.5%
|
|
26.3%
|
|
|
|
|
|
|
|
|
|
The Company
supplements its consolidated financial statements, which are
prepared and presented in accordance with US GAAP, with certain
non-GAAP financial measures. As required by the Securities and
Exchange Commission rules, the tables above present a
reconciliation of the Company's non-GAAP financial measures to the
most directly comparable US GAAP measure. Each of the non-GAAP
measures set forth above should be considered in addition to the
comparable US GAAP measure, and may not be comparable to similarly
titled measures reported by other companies. The Company believes
these non-GAAP measures, when reconciled to the corresponding US
GAAP measure, help its investors as follows: Non-GAAP revenue
measures that assist in identifying growth trends and in
comparisons of revenue with prior and future periods and non-GAAP
profitability measures that assist in understanding the long-term
profitability trends of the Company's business and in comparisons
of its profits with prior and future periods.
|
|
The Company excludes
certain items from its non-GAAP revenue measures because these
items can vary dramatically between periods and can obscure
underlying business trends. Items excluded from the Company's
non-GAAP revenue measures include: foreign currency transactions
and translation, more or fewer shipping days in a period and the
impact of acquisitions.
|
|
The Company excludes
certain items from its non-GAAP profitability measures because
these items may not be indicative of, or are unrelated to, the
Company's core operating performance. Items excluded from the
Company's non-GAAP profitability measures include: restructuring,
acquisition and integration-related and other costs, legal
settlements and reserves, tradename impairments, acquisition
purchase accounting (inventory step-up), release of indemnification
assets and the reversal of uncertain tax positions.
|
View original
content:http://www.prnewswire.com/news-releases/mohawk-industries-reports-record-q2-results-300495652.html
SOURCE Mohawk Industries, Inc.