CALHOUN, Ga., July 25, 2018 /PRNewswire/ -- Mohawk
Industries, Inc. (NYSE: MHK) today announced 2018 second quarter net earnings of $197 million and
diluted earnings per share (EPS) of $2.62. Adjusted net earnings were $263
million and EPS was $3.51, excluding restructuring, acquisition and other charges, a 6%
decrease from last year. Net sales for the second quarter of 2018 were $2.6 billion, up 5% in the
quarter and 3% on a constant currency basis. For the second quarter of 2017, net sales were $2.5
billion, net earnings were $261 million and EPS was $3.48;
adjusted net earnings were $278 million and EPS was $3.72, excluding
restructuring, acquisition and other charges.
For the six months ending June 30, 2018, net earnings and EPS were $405
million and $5.41, respectively. Net earnings excluding restructuring, acquisition and other
charges were $488 million and EPS was $6.52, an increase over the
2017 six-month period adjusted EPS. For the 2018 six-month period, net sales were $5.0 billion, an
increase of 7% versus prior year as reported or 3% on a constant currency and legacy basis. For the six-month period ending
July 1, 2017, net sales were $4.7 billion, net earnings were
$461 million and EPS was $6.17; excluding restructuring, acquisition
and other charges, net earnings and EPS were $482 million and $6.44.
Commenting on Mohawk Industries' second quarter performance, Jeffrey S. Lorberbaum, Chairman
and CEO, stated, "Our results fell short of our expectations, and we are taking actions to improve the performance of our U.S.
businesses. With the overall economy, our results were negatively impacted by input inflation, higher transportation costs, a
stronger dollar and a tight labor market. We were also affected by changing product mix, timing of price increases, lower
production units, start-up of new projects and the delayed Godfrey Hirst closing. To address these, we are raising prices,
expanding in growing channels and participating in new products and geographies. In the U.S. market, we are increasing our LVT
production and sourcing, as LVT continues gaining market share.
"Our businesses outside North America showed significant improvement and our results improved
more without start-up costs and expired patents. Although the economy in Europe slowed somewhat,
the results in most of our non-U.S. businesses improved substantially with LVT, Russian ceramic, wood panels and insulation
leading the growth. As the dollar strengthened during the period, the Euro fell from $1.24 to
$1.16, reducing our translated results in U.S. dollars.
"Our company and industry are absorbing significant inflation. This year, we have had two carpet price increases and recently
followed those with a third increase to offset additional material and freight inflation. We are taking pricing actions in most
product categories impacted by inflation, including our higher value ceramic products.
"During the quarter, our new expansion projects had start-up expenses of $15 million as we
continued investing to broaden our product offering and geographic penetration. These investments will enhance our sales and
profitability, with most of the impact occurring in 2019 and beyond.
"For the quarter, our Global Ceramic Segment sales increased 3% as reported and 2% on a constant currency basis. Operating
margin was approximately 15% both as reported and on an adjusted basis, declining year over year due to inflation, product mix
and start-up costs. During the period, our North American ceramic volume improved with our average price weakening from growth in
lower value products and channels. To increase our share of the ceramic market, we are delivering innovative products, enhancing
our service and increasing our participation in the home center, builder and commercial channels. Our U.S. countertop growth is
accelerating, and construction on our quartz countertop plant in Tennessee is on schedule, with
production slated to begin by the end of this year. In Mexico, our sales increased as the
quarter progressed, outpacing the market. We have doubled production at our Salamanca plant and
introduced larger sizes to the market. European ceramic sales slowed slightly with the economy, while margins increased from
improved price and mix and higher productivity. As we expand our Polish factory, we are preparing to realign manufacturing among
our European plants to optimize our assets and improve our offering. Our Russian ceramic sales and margins remain strong, and we
are expanding our porcelain floor and wall tile capacity.
"During the quarter, our Flooring North America Segment's sales increased 2%. The segment's operating margin was 9.5% as
reported and 10% on an adjusted basis, absorbing inflation, lower than expected production and start-up costs. The realization of
our price increases was later and our product mix declined more than we anticipated. As our raw materials and freight costs
continue to escalate, we announced another price increase to recover. Our LVT sales in the period grew less than we forecast due
to a delay in shipments of our sourced products. We anticipate a significant increase in LVT sales as our new U.S. production
ramps up and the supply of sourced products increases in the third period. Our residential carpet improved led by the builder,
multi-family and Main Street channels. Our new introductions in SmartStrand Silk Reserve, Air.O unified soft flooring and our
luxury Karastan collections gained momentum in the market. Our new RevWood collections with water proof technology are growing
rapidly in the retail and builder channels as an alternative to hardwood. Our commercial hard surface collections showed stronger
growth, and our commercial carpet bookings strengthened as we progressed through the period.
"For the quarter, our Flooring Rest of the World Segment's sales increased 16% as reported and 8% on a constant currency
basis. The segment's operating income increased 16% as reported, with an adjusted operating margin of 17%, as a result of
improved price, product mix and productivity, offsetting inflation, start-up costs and expired patents. Our LVT sales were up
dramatically and will increase more with our manufacturing expansion. Until now, we have been producing flexible LVT, and we have
completed the initial production on rigid LVT, which will be launching in the third quarter. Our new premium laminate products
utilizing unique technologies and water resistance are taking share and improving our mix. In Russia, we are introducing our latest European technology with our new laminate plant expansion. We are
using our European sheet vinyl to build demand for our new Russian plant, which should start up by the end of this year. Our new
carpet tile plant in Belgium is ramping up to penetrate the European commercial flooring market.
Our wood panels and insulation products grew significantly from our manufacturing investments, better material supply and
stronger market conditions. We completed the Godfrey Hirst acquisition on July 2, a month later
than we had anticipated, and we are implementing strategies to become a total flooring provider in Australia and New Zealand as we have in the U.S.
"We are taking a comprehensive approach to improve our performance and profitability in the U.S. Our initiatives to improve
pricing, increase sales in growing channels and reduce cost will benefit the remainder of the year. Given the impact of
inflation, timing of price increases and other challenges, we do not anticipate that our actions in the U.S. will offset the
pressures we are facing before next year. We expect continued strength in Europe and
Russia, where inflation and shifting product preferences are less intense than in the U.S.
Around the globe, we are entering new products and geographies as well as expanding constrained categories. Having closed Godfrey
Hirst, we are already enhancing the largest flooring provider in Australia and New Zealand. In the U.S., we are investing in growing categories such as LVT and quartz countertops. If the
recently announced Chinese tariffs are implemented, they will enhance our U.S. market position and results. Taking all of this
into account, our EPS guidance for the third quarter is $3.54 to $3.64, excluding any one-time charges.
"We are passing through inflation, optimizing our new expansions and maximizing our LVT position to increase our
profitability. Our talented organization, innovative products and strong balance sheet provide long-term advantages, and we
continue to pursue acquisitions that bolt on or add new dimensions to expand the value of our company."
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, Feltex, Godfrey Hirst, 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; taxes and tax reform, product and other claims;
litigation; and other risks identified in Mohawk's SEC reports and public announcements.
Conference call Thursday, July 26, 2018, 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 # 1166308. A replay will be available until August 25, 2018, by
dialing 1-855-859-2056 for US/local calls and 1-404-537-3406 for International/Local calls and entering Conference ID #
1166308.
|
MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Consolidated Statement of Operations Data
|
|
Quarter Ended
|
|
Six Months Ended
|
|
(Amounts in thousands, except per share data)
|
|
June 30, 2018
|
|
July 1, 2017
|
|
June 30, 2018
|
|
July 1, 2017
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
2,577,014
|
|
2,453,038
|
|
$
|
4,989,216
|
|
4,673,683
|
|
Cost of sales
|
|
1,810,459
|
|
1,673,902
|
|
3,517,969
|
|
3,214,194
|
|
Gross profit
|
|
766,555
|
|
779,136
|
|
1,471,247
|
|
1,459,489
|
|
Selling, general and administrative expenses
|
|
440,248
|
|
423,311
|
|
876,541
|
|
828,880
|
|
Operating income
|
|
326,307
|
|
355,825
|
|
594,706
|
|
630,609
|
|
Interest expense
|
|
7,863
|
|
8,393
|
|
15,391
|
|
16,595
|
|
Other expense (income), net
|
|
2,090
|
|
3,002
|
|
6,088
|
|
170
|
|
Earnings before income taxes
|
|
316,354
|
|
344,430
|
|
573,227
|
|
613,844
|
|
Income tax expense
|
|
118,809
|
|
82,682
|
|
166,441
|
|
151,040
|
|
Net earnings including
noncontrolling interest
|
|
197,545
|
|
261,748
|
|
406,786
|
|
462,804
|
|
Net income attributable to noncontrolling interest
|
|
959
|
|
1,067
|
|
1,434
|
|
1,569
|
|
Net earnings attributable to Mohawk Industries, Inc.
|
|
$
|
196,586
|
|
260,681
|
|
$
|
405,352
|
|
461,235
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share attributable to Mohawk Industries,
Inc.
|
|
|
|
|
|
|
|
|
|
Basic earnings per share attributable to Mohawk Industries, Inc.
|
|
$
|
2.64
|
|
3.51
|
|
$
|
5.44
|
|
6.21
|
|
Weighted-average common shares outstanding - basic
|
|
74,597
|
|
74,327
|
|
74,525
|
|
74,269
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share attributable to Mohawk Industries,
Inc.
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share attributable to Mohawk Industries,
Inc.
|
|
$
|
2.62
|
|
3.48
|
|
$
|
5.41
|
|
6.17
|
|
Weighted-average common shares outstanding - diluted
|
|
74,937
|
|
74,801
|
|
74,928
|
|
74,773
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Financial Information
|
|
|
|
|
|
|
|
|
|
(Amounts in thousands)
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
$
|
127,048
|
|
109,762
|
|
$
|
249,702
|
|
214,785
|
|
Capital expenditures
|
|
$
|
247,418
|
|
224,153
|
|
$
|
498,354
|
|
425,423
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Balance Sheet Data
|
|
|
|
|
|
|
|
|
|
(Amounts in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2018
|
|
July 1, 2017
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
|
$
|
518,226
|
|
130,238
|
|
Receivables, net
|
|
|
|
|
|
1,737,935
|
|
1,639,614
|
|
Inventories
|
|
|
|
|
|
2,061,204
|
|
1,865,941
|
|
Prepaid expenses and other current assets
|
|
|
|
|
|
456,315
|
|
374,930
|
|
Total current assets
|
|
|
|
|
|
4,773,680
|
|
4,010,723
|
|
Property, plant and equipment, net
|
|
|
|
|
|
4,421,073
|
|
3,892,251
|
|
Goodwill
|
|
|
|
|
|
2,447,046
|
|
2,417,058
|
|
Intangible assets, net
|
|
|
|
|
|
858,532
|
|
878,301
|
|
Deferred income taxes and other non-current assets
|
|
|
|
|
|
393,708
|
|
391,158
|
|
Total assets
|
|
|
|
|
|
$
|
12,894,039
|
|
11,589,491
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
Current portion of long-term debt and commercial paper
|
|
|
|
|
|
$
|
1,146,511
|
|
1,754,077
|
|
Accounts payable and accrued expenses
|
|
|
|
|
|
1,589,561
|
|
1,466,658
|
|
Total current
liabilities
|
|
|
|
|
|
2,736,072
|
|
3,220,735
|
|
Long-term debt, less current portion
|
|
|
|
|
|
1,884,023
|
|
1,174,440
|
|
Deferred income taxes and other long-term liabilities
|
|
|
|
|
|
870,467
|
|
713,110
|
|
Total liabilities
|
|
|
|
|
|
5,490,562
|
|
5,108,285
|
|
Redeemable noncontrolling interest
|
|
|
|
|
|
30,043
|
|
26,713
|
|
Total stockholders' equity
|
|
|
|
|
|
7,373,434
|
|
6,454,493
|
|
Total liabilities and stockholders' equity
|
|
|
|
|
|
$
|
12,894,039
|
|
11,589,491
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Information
|
|
Quarter Ended
|
|
As of or for the Six Months Ended
|
|
(Amounts in thousands)
|
|
June 30, 2018
|
|
July 1, 2017
|
|
June 30, 2018
|
|
July 1, 2017
|
|
|
|
|
|
|
|
|
|
|
Net sales:
|
|
|
|
|
|
|
|
|
|
Global Ceramic
|
|
$
|
929,297
|
|
902,670
|
|
$
|
1,805,845
|
|
1,687,639
|
|
Flooring NA
|
|
1,057,570
|
|
1,040,299
|
|
2,007,928
|
|
1,979,795
|
|
Flooring ROW
|
|
590,147
|
|
510,069
|
|
1,175,443
|
|
1,006,249
|
|
Intersegment sales
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Consolidated net
sales
|
|
$
|
2,577,014
|
|
2,453,038
|
|
$
|
4,989,216
|
|
4,673,683
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss):
|
|
|
|
|
|
|
|
|
|
Global Ceramic
|
|
$
|
134,760
|
|
152,557
|
|
$
|
248,177
|
|
268,593
|
|
Flooring NA
|
|
100,662
|
|
127,482
|
|
175,410
|
|
219,624
|
|
Flooring ROW
|
|
100,166
|
|
86,052
|
|
189,226
|
|
162,147
|
|
Corporate and intersegment eliminations
|
|
(9,281)
|
|
(10,266)
|
|
(18,107)
|
|
(19,755)
|
|
Consolidated operating
income
|
|
$
|
326,307
|
|
355,825
|
|
$
|
594,706
|
|
630,609
|
|
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
Global Ceramic
|
|
|
|
|
|
$
|
4,974,791
|
|
4,736,068
|
|
Flooring NA
|
|
|
|
|
|
3,927,190
|
|
3,625,350
|
|
Flooring ROW
|
|
|
|
|
|
3,701,419
|
|
2,984,716
|
|
Corporate and intersegment eliminations
|
|
|
|
|
|
290,639
|
|
243,357
|
|
Consolidated assets
|
|
|
|
|
|
$
|
12,894,039
|
|
11,589,491
|
|
|
|
|
|
|
|
|
|
|
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
Six Months Ended
|
|
|
|
|
|
|
June 30, 2018
|
|
July 1, 2017
|
|
June 30, 2018
|
|
July 1, 2017
|
|
Net earnings attributable to Mohawk Industries, Inc.
|
|
|
|
$
|
196,586
|
|
260,681
|
|
405,352
|
|
461,235
|
|
Adjusting items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring, acquisition and integration-related and other
costs
|
|
|
|
16,042
|
|
15,878
|
|
38,146
|
|
19,856
|
|
Acquisitions purchase accounting , including inventory step-up
|
|
|
|
194
|
|
9,571
|
|
1,548
|
|
9,763
|
|
Release of indemnification asset
|
|
|
|
|
-
|
|
-
|
|
1,749
|
|
-
|
|
Income taxes - reversal of uncertain tax position
|
|
|
|
-
|
|
-
|
|
(1,749)
|
|
-
|
|
Income taxes
|
|
|
|
|
|
50,106
|
|
(7,677)
|
|
43,166
|
|
(9,091)
|
|
Adjusted net earnings attributable to Mohawk Industries, Inc.
|
|
|
|
$
|
262,928
|
|
278,453
|
|
488,212
|
|
481,763
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted diluted earnings per share attributable to Mohawk Industries,
Inc.
|
|
|
|
$
|
3.51
|
|
3.72
|
|
6.52
|
|
6.44
|
|
Weighted-average common shares outstanding - diluted
|
|
|
|
|
74,937
|
|
74,801
|
|
74,928
|
|
74,773
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Total Debt to Net Debt
|
|
|
|
|
(Amounts in thousands)
|
|
|
|
|
|
|
|
|
June 30, 2018
|
|
Current portion of long-term debt and commercial paper
|
|
$
|
1,146,511
|
|
Long-term debt, less current portion
|
|
|
1,884,023
|
|
Less: Cash and cash equivalents
|
|
|
518,226
|
|
Net Debt
|
|
|
|
$
|
2,512,308
|
|
Reconciliation of Operating Income to Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
(Amounts in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Trailing Twelve
|
|
|
|
|
Quarters Ended
|
|
Months Ended
|
|
|
|
|
September 30, 2017
|
|
December 31, 2017
|
|
March 31, 2018
|
|
June 30, 2018
|
|
June 30, 2018
|
|
Operating income
|
|
|
|
380,098
|
|
343,466
|
|
268,399
|
|
326,307
|
|
1,318,270
|
|
Other (expense) income
|
|
|
|
(1,285)
|
|
(3,750)
|
|
(3,998)
|
|
(2,090)
|
|
(11,123)
|
|
Net (income) loss attributable to noncontrolling interest
|
|
(997)
|
|
(488)
|
|
(475)
|
|
(959)
|
|
(2,919)
|
|
Depreciation and amortization
|
|
|
113,515
|
|
118,372
|
|
122,654
|
|
127,048
|
|
481,589
|
|
EBITDA
|
|
|
|
491,331
|
|
457,600
|
|
386,580
|
|
450,306
|
|
1,785,817
|
|
Restructuring, acquisition and integration-related and other
costs
|
|
13,853
|
|
15,231
|
|
22,104
|
|
16,042
|
|
67,230
|
|
Acquisitions purchase accounting, including inventory step-up
|
|
3,551
|
|
-
|
|
1,354
|
|
194
|
|
5,099
|
|
Release of indemnification asset
|
|
|
-
|
|
4,459
|
|
1,749
|
|
-
|
|
6,208
|
|
Adjusted EBITDA
|
|
|
|
508,735
|
|
477,290
|
|
411,787
|
|
466,542
|
|
1,864,354
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Debt to Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
1.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Sales to Net Sales on a Constant Exchange Rate
Excluding Acquisition Volume
|
|
|
|
|
|
|
|
|
(Amounts in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
Six Months Ended
|
|
|
|
|
June 30, 2018
|
|
July 1, 2017
|
|
June 30, 2018
|
|
July 1, 2017
|
|
Net sales
|
|
|
|
$
|
2,577,014
|
|
2,453,038
|
|
4,989,216
|
|
4,673,683
|
|
Adjustment to net sales on a constant exchange rate
|
|
(48,326)
|
|
-
|
|
(147,158)
|
|
-
|
|
Net sales on a constant exchange rate
|
|
|
2,528,688
|
|
2,453,038
|
|
4,842,058
|
|
4,673,683
|
|
Less: impact of acquisition volume
|
|
|
(1,239)
|
|
-
|
|
(46,515)
|
|
-
|
|
Net sales on a constant exchange rate excluding acquisition
volume
|
|
$
|
2,527,449
|
|
2,453,038
|
|
4,795,543
|
|
4,673,683
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Segment Net Sales to Segment Net Sales on a Constant
Exchange Rate Excluding Acquisition Volume
|
|
|
|
|
(Amounts in thousands)
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
Global Ceramic
|
|
|
|
June 30, 2018
|
|
July 1, 2017
|
|
Net sales
|
|
|
|
$
|
929,297
|
|
902,670
|
|
Adjustment to segment net sales on a constant exchange rate
|
|
(10,986)
|
|
-
|
|
Segment net sales on a constant exchange rate
|
|
918,311
|
|
902,670
|
|
Less: impact of acquisition volume
|
|
|
(1,239)
|
|
-
|
|
Segment net sales on a constant exchange rate excluding acquisition
volume
|
|
$
|
917,072
|
|
902,670
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Segment Net Sales to Segment Net Sales on a Constant
Exchange Rate
|
|
|
|
|
|
(Amounts in thousands)
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
Flooring ROW
|
|
|
|
June 30, 2018
|
|
July 1, 2017
|
|
Net sales
|
|
|
|
$
|
590,147
|
|
510,069
|
|
Adjustment to segment net sales on a constant exchange rate
|
|
(37,340)
|
|
-
|
|
Segment net sales on a constant exchange rate
|
|
$
|
552,807
|
|
510,069
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Gross Profit to Adjusted Gross Profit
|
|
|
|
|
|
(Amounts in thousands)
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
|
|
|
June 30, 2018
|
|
July 1, 2017
|
|
Gross Profit
|
|
|
|
$
|
766,555
|
|
779,136
|
|
Adjustments to gross profit:
|
|
|
|
|
|
|
|
Restructuring, acquisition and integration-related and other
costs
|
|
12,018
|
|
13,028
|
|
Acquisitions purchase accounting, including inventory step-up
|
|
194
|
|
9,571
|
|
Adjusted gross profit
|
|
|
|
$
|
778,767
|
|
801,735
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Selling, General and Administrative Expenses to
Adjusted Selling, General and Administrative Expenses
|
|
|
|
|
|
(Amounts in thousands)
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
|
|
|
June 30, 2018
|
|
July 1, 2017
|
|
Selling, general and administrative expenses
|
|
|
$
|
440,248
|
|
423,311
|
|
Adjustments to selling, general and administrative expenses:
|
|
|
|
|
|
Restructuring, acquisition and integration-related and other
costs
|
|
(4,024)
|
|
(2,850)
|
|
Adjusted selling, general and administrative expenses
|
|
$
|
436,224
|
|
420,461
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Operating Income to Adjusted Operating
Income
|
|
|
|
|
|
(Amounts in thousands)
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
|
|
|
June 30, 2018
|
|
July 1, 2017
|
|
Operating income
|
|
|
|
$
|
326,307
|
|
355,825
|
|
Adjustments to operating income:
|
|
|
|
|
|
|
Restructuring, acquisition and integration-related and other
costs
|
|
16,042
|
|
15,878
|
|
Acquisitions purchase accounting, including inventory step-up
|
|
194
|
|
9,571
|
|
Adjusted operating income
|
|
|
|
$
|
342,543
|
|
381,274
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Segment Operating Income to Adjusted Segment Operating
Income
|
|
|
|
|
|
(Amounts in thousands)
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
Global Ceramic
|
|
|
|
June 30, 2018
|
|
July 1, 2017
|
|
Operating income
|
|
|
|
$
|
134,760
|
|
152,557
|
|
Adjustments to segment operating income:
|
|
|
|
|
|
|
Restructuring, acquisition and integration-related and other
costs
|
|
5,408
|
|
1,305
|
|
Acquisitions purchase accounting, including inventory step-up
|
|
-
|
|
9,571
|
|
Adjusted segment operating income
|
|
|
$
|
140,168
|
|
163,433
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Segment Operating Income to Adjusted Segment Operating
Income
|
|
|
|
|
|
(Amounts in thousands)
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
Flooring NA
|
|
|
|
June 30, 2018
|
|
July 1, 2017
|
|
Operating income
|
|
|
|
$
|
100,662
|
|
127,482
|
|
Adjustments to segment operating income:
|
|
|
|
|
|
|
Restructuring, acquisition and integration-related and other
costs
|
|
8,881
|
|
12,196
|
|
Adjusted segment operating income
|
|
|
$
|
109,543
|
|
139,678
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Segment Operating Income to Adjusted Segment Operating
Income
|
|
|
|
|
|
(Amounts in thousands)
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
Flooring ROW
|
|
|
|
June 30, 2018
|
|
July 1, 2017
|
|
Operating income
|
|
|
|
$
|
100,166
|
|
86,052
|
|
Adjustments to segment operating income:
|
|
|
|
|
|
|
Restructuring, acquisition and integration-related and other
costs
|
|
1,338
|
|
2,170
|
|
Acquisitions purchase accounting, including inventory step-up
|
|
194
|
|
-
|
|
Adjusted segment operating income
|
|
|
$
|
101,698
|
|
88,222
|
|
|
|
|
|
|
|
|
|
Reconciliation of Earnings including Noncontrolling Interests Before
Income Taxes to Adjusted Earnings Including Noncontrolling Interests Before Income Taxes
|
|
(Amounts in thousands)
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
|
|
|
June 30, 2018
|
|
July 1, 2017
|
|
Earnings before income taxes
|
|
|
|
$
|
316,354
|
|
344,430
|
|
Noncontrolling interests
|
|
|
|
(959)
|
|
(1,067)
|
|
Adjustments to earnings including noncontrolling interests before income
taxes:
|
|
|
|
|
|
Restructuring, acquisition and integration-related & other
costs
|
|
16,042
|
|
15,878
|
|
Acquisitions purchase accounting, including inventory step-up
|
|
194
|
|
9,571
|
|
Adjusted earnings including noncontrolling interests before income
taxes
|
|
$
|
331,631
|
|
368,812
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Income Tax Expense to Adjusted Income Tax
Expense
|
|
|
|
|
|
(Amounts in thousands)
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
|
|
|
June 30, 2018
|
|
July 1, 2017
|
|
Income tax expense
|
|
|
|
$
|
118,809
|
|
82,682
|
|
Income tax effect of adjusting items
|
|
|
|
(50,106)
|
|
7,677
|
|
Adjusted income tax expense
|
|
|
$
|
68,703
|
|
90,359
|
|
|
|
|
|
|
|
|
Adjusted income tax rate
|
|
|
|
20.7%
|
|
24.5%
|
|
|
|
|
|
|
|
|
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 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, acquisition purchase accounting, including 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-q2-results-300686616.html
SOURCE Mohawk Industries, Inc.