CALHOUN, Ga., July 27, 2017 /PRNewswire/ -- 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.