Server: Microsoft-IIS/4.0 Date: Thu, 18 Dec 1997 04:44:16 GMT Content-Type: text/html Accept-Ranges: bytes Last-Modified: Sat, 20 Sep 1997 15:39:02 GMT ETag: "78562f52dbc5bc1:15814" Content-Length: 73709
![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() |
. |
MOHAWK INDUSTRIES, INC. ANNOUNCES
SECOND QUARTER 1997 RESULTSCalhoun, Georgia, July 17, 1997 - Mohawk Industries, Inc. (NASDAQ/NMS-MOHK) today announced the highest quarterly earnings per share attained by the Company since its stock first publicly traded in 1992. Net earnings for the quarter ended June 28, 1997 increased 18% to $19,307,000, or $0.56 per share, compared to $16,395,000, or $0.48 per share, for the second quarter 1996. This improvement in net earnings was the result of continued strong gross profit margins and lower selling, administrative and interest expenses. Net sales for the quarter increased 1% to $479,164,000 compared to $474,552,000 for the second quarter 1996. The second quarter 1997 net sales comparison to 1996 was unfavorably impacted by customers accelerating purchases to the first quarter of 1997 and second quarter of 1996 because of price increases in April 1997 and July 1996, respectively.
Net earnings for the first six months of 1997 were the highest first half earnings in the Companys history with net earnings of $27,854,000 or $0.80 per share. This compares to first half 1996 net earnings of $21,733,000 or $0.63 per share. This improvement in net earnings was attributable to increased sales, manufacturing improvements from restructuring and reduced selling, administrative and interest expenses. Net sales for the first half of 1997 were $891,993,000 representing a 4% increase from first half 1996 sales of $858,219,000.
In commenting on the second quarter performance, David L. Kolb, Chairman and CEO, stated, "We continued our trend of improving quarterly earnings per share on a year-to-year comparison for the sixth consecutive quarter. Gross profit for the quarter remained strong at 24% of net sales. Cost reductions in both selling and administrative expenses contributed positively to the earnings growth. Positive cash flow from operations reduced our requirement for debt financing resulting in lower interest expense for both the current quarter and six-month period and improved our debt-to-total capitalization ratio to below 50%. We continue to support the Carpet and Rug Institutes industry-wide advertising campaign, and funding for that program reduced earnings per share by $0.02 for the quarter. The campaign is progressing as scheduled, and we are optimistic about the ultimate result of the campaign.
Our proposed acquisition of selected assets of Diamond Rug & Carpet Mills, Inc. should close during the third quarter of 1997. We are prepared to integrate these assets into Mohawk operations immediately after the closing. We believe this acquisition will further enhance our competitive position within the industry."
Certain of the statements in the immediately preceding paragraphs regarding the effects of the Diamond acquisition and the industry-wide advertising campaign may constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1993, as amended, and are subject to the safe harbor provisions thereof. Those statements are based on assumptions regarding the Companys ability to consummate the Diamond acquisition and successfully integrate the acquired assets and the effectiveness of the advertising campaign. These or other assumptions could prove inaccurate and, therefore, there can be no assurance that the "forward-looking statements" will prove to be accurate.
Mohawk is a leading producer of woven and tufted broadloom carpet and rugs for residential and commercial applications. The Company designs, manufactures and markets carpet in a broad range of colors, textures and patterns and is widely recognized through its premier brand names, some of which include "Aladdin," "Alexander Smith," "Bigelow," "Galaxy," "Harbinger," "Helios," "Horizon," "Karastan," "Mohawk" and "Mohawk Commercial." Mohawk offers a broad line of washable accent and bath rugs through Aladdin and area rugs through Karastan and American Rug Craftsmen. The Company markets its products primarily through retailers and commercial dealers.
MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES
Consolidated Statement of Earnings Data | Three Months Ended | Six Months Ended | |||||||
(Amounts in thousands, except per share data) | Jun 28, 1997 | Jun 29, 1996 (1) | Jun 28, 1997 | Jun 29, 1996 (1) | |||||
Net sales | $ | 479,164 | 474,552 | 891,993 | 858,219 | ||||
Cost of sales | 364,330 | 358,617 | 683,250 | 656,111 | |||||
Gross profit | 114,834 | 115,935 | 208,743 | 202,108 | |||||
Selling, general and administrative expenses | 74,487 | 79,034 | 146,448 | 147,162 | |||||
Operating income | 40,347 | 36,901 | 62,295 | 54,946 | |||||
Interest expense | 7,504 | 8,691 | 15,027 | 17,182 | |||||
Other expense, net | 939 | 1,114 | 1,239 | 1,845 | |||||
Earnings before income taxes | 31,904 | 27,096 | 46,029 | 35,919 | |||||
Income taxes | 12,597 | 10,701 | 18,175 | 14,186 | |||||
Net earnings | $ | 19,307 | 16,395 | 27,854 | 21,733 | ||||
Earnings per common and common equivalent share | $ | 0.56 | 0.48 | 0.80 | 0.63 | ||||
Weighted average common and common equivalent shares outstanding | 34,785 | 34,514 | 34,830 | 34,306 | |||||
Consolidated Balance Sheet Data | |||||||||
(Amounts in thousands) | |||||||||
Jun 28, 1997 | Jun 29, 1996 | ||||||||
ASSETS | |||||||||
Current assets: | |||||||||
Receivables | $ | 234,252 | 228,322 | ||||||
Inventories | 326,004 | 326,202 | |||||||
Prepaid expenses | 15,370 | 16,424 | |||||||
Deferred income taxes | 18,186 | 12,858 | |||||||
Total current assets | 593,812 | 583,806 | |||||||
Property, plant and equipment, net | 306,594 | 329,379 | |||||||
Other assets | 75,588 | 81,673 | |||||||
$ | 975,994 | 994,858 | |||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||
Current liabilities: | |||||||||
Current portion of long-term debt and notes payable | $ | 20,500 | 81,089 | ||||||
Accounts payable and accrued expenses | 225,387 | 229,761 | |||||||
Total current liabilities | 245,887 | 310,850 | |||||||
Long-term debt, less current portion | 339,532 | 353,247 | |||||||
Deferred income taxes and other long-term liabilities | 28,689 | 26,805 | |||||||
Total liabilities | 614,108 | 690,902 | |||||||
Total stockholders' equity | 361,886 | 303,956 | |||||||
$ | 975,994 | 994,858 | |||||||
(1) Certain prior year financial statement balances have been reclassified to conform with the current year's presentation. | |||||||||
[ Top of page ]