Mohawk Industries, Inc. Announces Fourth Quarter Earnings
Mohawk Industries, Inc. Announces Fourth Quarter Earnings
vrijdag 22-02-2013 02:02
Dit is een origineel bericht van PR Newswire
CALHOUN, Georgia, Feb. 21, 2013 /PRNewswire/ -- Mohawk Industries, Inc. today announced 2012 fourth quarter net earnings of $66 million and diluted earnings per share (EPS) of $0.95. Excluding restructuring charges, net earnings were $70 million and EPS was $1.01, a 40% increase over last year's fourth quarter adjusted EPS. Net sales for the fourth quarter of 2012 were $1.44 billion, an increase of 4% versus the prior year's fourth quarter and an increase of 5% on a constant exchange rate basis. For the fourth quarter of 2011, net sales were $1.38 billion, net earnings were $43 million and EPS was $0.62. Excluding unusual items, adjusted net earnings for the fourth quarter of 2011 were $50 million and adjusted EPS was $0.72.
For the year ended December 31, 2012, net sales were $5.79 billion, an increase of 3% versus the prior year and 4% on a constant exchange rate basis. Net earnings and EPS for the year were $250 million and $3.61, respectively. Excluding restructuring charges, net earnings were $262 million and EPS was $3.78, an increase of 29% over adjusted EPS in 2011. For the year ended December 31, 2011, net sales were $5.64 billion, net earnings were $174 million and EPS was $2.52. Excluding unusual items, adjusted 2011 net earnings and adjusted EPS were $202 million and $2.92, respectively.
Commenting on Mohawk Industries' fourth quarter performance, Jeffrey S. Lorberbaum, Chairman and CEO, stated, "Price increases, productivity improvements, mix and lower interest all contributed to solid results for the period. During the quarter, we generated adjusted EBITDA of $165 million and cash flow from operations of $289 million and for the year adjusted EBITDA of $677 million and cash flow from operations of $588 million. In the U.S., we improved our mix as our higher value products gained greater traction with consumers. Our recent expansion into new international markets has generated additional growth in Mexico, Russia and Australia. In 2012, we kept SG&A dollars in line with 2011, while investing in innovative marketing and products. We are continuing to strategically invest in growing our core businesses and since October, we have announced the agreement to acquire three businesses - Pergo, Marazzi and Spano. All of these transactions in combination with our existing businesses will position Mohawk for significant growth in the future. In January, we successfully issued $600 million of ten year bonds at a coupon rate of 3.85% and plan to use the proceeds to finance a portion of our Marazzi acquisition."
Mohawk segment sales were flat during the fourth quarter, with carpet sales performing better than rug sales. Our rug sales improved from last quarter, though they remain below the prior year as lower product mix and retail sales continued to decrease our results. Our new premium carpets have improved our overall selling prices and margins however sales levels were impacted by home center product transitions that we expect to be completed during the first quarter. We recently announced a carpet price increase of 4-6% to cover rising material costs. By applying the innovative processes used to develop SmartStrand Silk, we introduced our Wear-Dated Embrace nylon collection in the fourth quarter. This extends our leadership position in the ultra-soft premium category. In the commercial category, we grew sales of our new carpet tile introductions made from our premium Duracolor fiber as designers embraced the styling with high performance stain and soil resistance. We executed manufacturing productivity improvements across the business through waste reduction, enhanced recycled content and improved efficiencies.
Dal-Tile segment sales grew 15% during the quarter, with gains in the U.S. and Mexico supported by new product introductions with enhanced textures, sophisticated designs and larger formats in both residential and commercial categories. Margin expansion came from higher volumes, enhanced productivity and improved yields partially offset by plant shutdowns to reduce inventory as our new capacity ramped up faster than anticipated. Sales grew in all residential channels with successful launches of new Reveal Imaging designs, coordinated wall, floor and mosaics collections, larger format tiles from our Chinese joint venture and new decorative assortments in the home center channel. Commercial sales continued strong with the hospitality sector leading the category. In Mexico, we increased production at our Salamanca facility and we are optimizing the plant's efficiencies and yields. During the quarter, Dal-Tile lowered overall manufacturing costs with higher efficiencies, improved material formulations, increased recycled content and effective quality initiatives.
Unilin segment sales grew 1% or 5% at a constant exchange rate. Increased laminate and hardwood sales in North America, growth in our insulation boards, expanded participation in the DIY channel and solid results from our Australian distribution business contributed to our sales improvement. Our margins were favorably impacted by lower amortization charges partially offset by material inflation and negative mix as European consumers purchased more value based alternatives. In North America, new product introductions, promotions and additional home center business enhanced our sales. To support continuing growth in our insulation board business, we have begun construction of a new manufacturing facility in France. As Western European housing contracted, our roof panel sales have declined and we reduced our workforce to balance accordingly. We have licensed patents for our click furniture to additional manufacturers who are introducing new products that will increase interest in the technology.
Through product innovation, expanded distribution and process improvements, Mohawk delivered solid fourth quarter results. We are seeing some inflation in our raw materials and are taking the appropriate actions in the marketplace to address. In the U.S., low mortgage rates, stabilizing home prices and improving employment should sustain the housing recovery. We believe that U.S. residential remodeling should see improvement in the future and that the European economic conditions are near a bottom. We anticipate revenue growth for 2013 as the U.S. market improves and we realize some benefits from recent acquisitions. The first quarter earnings are seasonally the lowest and represented a little less than one sixth of 2012's full year results. With this, our guidance for first quarter earnings is $0.77 to $0.86 per share, excluding any restructuring, acquisition costs and interest on the new bonds for Marazzi.
Mohawk is a leading supplier of flooring for both residential and commercial applications. Mohawk provides a complete selection for all markets of carpet, ceramic tile, laminate, wood, stone, vinyl and rugs. These products are marketed under the premier brands in the industry including Mohawk, Karastan, Lees, Bigelow, Durkan, Mohawk Home, Daltile, American Olean, Unilin, Pergo and Quick-Step. Mohawk's unique merchandising and marketing assists consumers in creating exquisite floors to fulfill their dreams. Mohawk provides a premium level of service with its own trucking fleet and local distribution in the U.S. Mohawk's international presence includes operations in Australia, Brazil, China, Europe, India, Malaysia, Mexico and Russia.
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 in raw material prices and other input costs; 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, February 22, 2013 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 # 91220581. A replay will be available until March 8, 2013 by dialing 855-859-2056 for US/local calls and 404-537-3406 for International/Local calls and entering Conference ID # 91220581.
MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES



Consolidated Statement of
Operations Three Months Ended
------------------
(Amounts in thousands, December 31, December
except per share data) 2012 31, 2011
------------- ---------

Net sales $1,435,659 1,378,297
Cost of sales 1,066,329 1,042,880
----------------------- --------- ---------
Gross profit 369,330 335,417
Selling, general and
administrative expenses 273,470 269,123
------------------------ ------- -------
Operating income 95,860 66,294
Interest expense 15,402 24,130
Other expense, net 1,366 257
------------------ ----- ---
Earnings before income taxes 79,092 41,907
Income tax expense 12,703 (1,990)
------------------ ------ ------
Net earnings 66,389 43,897
Net earnings attributable to
noncontrolling interest - (966)
---------------------------- --- ----
Net earnings attributable to
Mohawk Industries, Inc. $66,389 42,931
---------------------------- ------- ------
Basic earnings per share
attributable to Mohawk
Industries, Inc. $0.96 0.62
------------------------ ----- ----
Weighted-average common
shares outstanding - basic 69,095 68,768
--------------------------- ------ ------
Diluted earnings per share
attributable to Mohawk
Industries, Inc. $0.95 0.62
-------------------------- ----- ----
Weighted-average common
shares outstanding -
diluted 69,536 69,016
----------------------- ------ ------

Other Financial Information
(Amounts in thousands)
Net cash provided by
operating activities $289,043 162,805
--------------------- -------- -------
Depreciation and
amortization $63,878 74,930
---------------- ------- ------
Capital expenditures $73,296 93,313
-------------------- ------- ------




Consolidated Statement of
Operations Twelve Months Ended
-------------------
(Amounts in thousands, December December
except per share data) 31, 2012 31, 2011
--------- ---------

Net sales 5,787,980 5,642,258
Cost of sales 4,297,922 4,225,379
----------------------- --------- ---------
Gross profit 1,490,058 1,416,879
Selling, general and
administrative expenses 1,110,550 1,101,337
------------------------ --------- ---------
Operating income 379,508 315,542
Interest expense 74,713 101,617
Other expense, net 303 14,051
------------------ --- ------
Earnings before income taxes 304,492 199,874
Income tax expense 53,599 21,649
------------------ ------ ------
Net earnings 250,893 178,225
Net earnings attributable to
noncontrolling interest (635) (4,303)
---------------------------- ---- ------
Net earnings attributable to
Mohawk Industries, Inc. 250,258 173,922
---------------------------- ------- -------
Basic earnings per share
attributable to Mohawk
Industries, Inc. 3.63 2.53
------------------------ ---- ----
Weighted-average common
shares outstanding - basic 68,988 68,736
--------------------------- ------ ------
Diluted earnings per share
attributable to Mohawk
Industries, Inc. 3.61 2.52
-------------------------- ---- ----
Weighted-average common
shares outstanding -
diluted 69,306 68,964
----------------------- ------ ------

Other Financial Information
(Amounts in thousands)
Net cash provided by
operating activities 587,590 300,993
--------------------- ------- -------
Depreciation and
amortization 280,293 297,734
---------------- ------- -------
Capital expenditures 208,294 275,573
-------------------- ------- -------





Consolidated Balance Sheet
Data
(Amounts in thousands)
December 31, December 31,
2012 2011
------------- -------------
ASSETS
Current assets:
Cash and cash equivalents $477,672 311,945
Receivables, net 679,473 686,165
Inventories 1,133,736 1,113,630
Prepaid expenses and other
current assets 147,580 135,514
Deferred income taxes 111,585 150,910
--------------------- ------- -------
Total current assets 2,550,046 2,398,164
Property, plant and equipment,
net 1,692,852 1,712,154
Goodwill 1,385,771 1,375,175
Intangible assets, net 553,799 605,100
Deferred income taxes and
other non-current assets 121,216 115,635
------------------------- ------- -------
Total assets $6,303,684 6,206,228
------------ ---------- ---------





LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Current portion of long-term
debt $55,213 386,255
Accounts payable and accrued
expenses 773,436 715,091
---------------------------- ------- -------
Total current liabilities 828,649 1,101,346
Long-term debt, less current
portion 1,327,729 1,200,184
Deferred income taxes and other
long-term liabilities 427,689 455,190
------------------------------- ------- -------
Total liabilities 2,584,067 2,756,720
----------------- --------- ---------
Noncontrolling interest - 33,723
----------------------- --- ------
Total stockholders' equity 3,719,617 3,415,785
-------------------------- --------- ---------
Total liabilities and
stockholders' equity $6,303,684 6,206,228
--------------------- ---------- ---------






Segment
Information Three Months Ended
------------------
(Amounts in December 31, December
thousands) 2012 31, 2011
------------- ---------

Net sales:
Mohawk $725,895 723,975
Dal-Tile 401,637 348,541
Unilin 329,969 326,321
Intersegment
sales (21,842) (20,540)
------------ ------- -------
Consolidated net
sales $1,435,659 1,378,297
---------------- ---------- ---------

Operating income
(loss):
Mohawk $51,968 30,687
Dal-Tile 21,039 18,387
Unilin 29,796 21,640
Corporate and
eliminations (6,943) (4,420)
------------- ------ ------
Consolidated
operating
income $95,860 66,294
------------ ------- ------

Assets:
Mohawk
Dal-Tile
Unilin
Corporate and
eliminations
-------------
Consolidated
assets
------------




Segment As of and for the Twelve
Information Months Ended
------------------------
(Amounts in December
thousands) December 31, 31, 2011
2012 ---------
----

Net sales:
Mohawk 2,912,055 2,927,674
Dal-Tile 1,616,383 1,454,316
Unilin 1,350,349 1,344,764
Intersegment
sales (90,807) (84,496)
------------ ------- -------
Consolidated net
sales 5,787,980 5,642,258
---------------- --------- ---------

Operating income
(loss):
Mohawk 158,196 109,874
Dal-Tile 120,951 101,298
Unilin 126,409 127,147
Corporate and
eliminations (26,048) (22,777)
------------- ------- -------
Consolidated
operating
income 379,508 315,542
------------ ------- -------

Assets:
Mohawk $1,721,214 1,769,065
Dal-Tile 1,731,258 1,732,818
Unilin 2,672,389 2,533,070
Corporate and
eliminations 178,823 171,275
------------- ------- -------
Consolidated
assets $6,303,684 6,206,228
------------ ---------- ---------





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
------------------------------
December 31, December 31,
2012 2011
------------ -----------
Net earnings
attributable to Mohawk
Industries, Inc. $ 66,389 42,931
Adjusting items:
Unrealized foreign
currency losses (1) - -
Operating lease
correction (2) - 6,035
Business restructurings 6,109 7,696
Debt extinguishment
costs - -
Income taxes (2,111) (7,152)
---------------------------
Adjusted net earnings
attributable to Mohawk
Industries, Inc. $ 70,387 49,510
---------------------------

Adjusted diluted
earnings per share
attributable to Mohawk
Industries, Inc. $ 1.01 0.72
Weighted-average common
shares outstanding -
diluted 69,536 69,016



Twelve Months Ended
-------------------
December 31, December 31,
2012 2011
------------ -----------
Net earnings
attributable to Mohawk
Industries, Inc. 250,258 173,922
Adjusting items:
Unrealized foreign
currency losses (1) - 9,085
Operating lease
correction (2) - 6,035
Business restructurings 18,564 23,209
Debt extinguishment
costs - 1,116
Income taxes (7,003) (11,749)
---------------------------
Adjusted net earnings
attributable to Mohawk
Industries, Inc. 261,819 201,618
---------------------------

Adjusted diluted
earnings per share
attributable to Mohawk
Industries, Inc. 3.78 2.92
Weighted-average common
shares outstanding -
diluted 69,306 68,964




Reconciliation of Operating Cash Flow to Free Cash Flow
(Amounts in thousands)
Three Months Ended
------------------
December 31, 2012
-----------------
Net cash provided by
operating activities $289,043
Capital expenditures 73,296
------
Free cash flow $215,747
-------------- --------

Reconciliation of Total Debt to Net Debt
(Amounts in thousands)
December 31,
December 31, 2012 2011
----------------- -------------
Current portion of long-
term debt $55,213 386,255
Long-term debt, less
current portion 1,327,729 1,200,184
Less: Cash and cash
equivalents 477,672 311,945
-------------------- -------
Net Debt $905,270 1,274,494
-------- -------- ---------






Reconciliation of Operating Income to Adjusted EBITDA
(Amounts in thousands)

Three Months Ended
------------------
March 31, 2012 June 30, 2012
-------------- -------------
Operating
income $71,976 107,718
Other
(expense)
income 1,825 (440)
Net
earnings
attributable
to
noncontrolling
interest (635) -
Depreciation
and
amortization 73,286 71,831
------------ ------ ------
EBITDA 146,452 179,109
Business
restructurings - 8,226
--------------- --- -----
Adjusted
EBITDA $146,452 187,335
-------- -------- -------

Net Debt
to
Adjusted
EBITDA
---------




Three Months Ended
------------------
September December 31,
29, 2012 2012
---------- -------------
Operating
income 103,954 95,860
Other
(expense)
income (322) (1,366)
Net
earnings
attributable
to
noncontrolling
interest - -
Depreciation
and
amortization 71,298 63,878
------------ ------ ------
EBITDA 174,930 158,372
Business
restructurings 4,229 6,109
--------------- ----- -----
Adjusted
EBITDA 179,159 164,481
-------- ------- -------

Net Debt
to
Adjusted
EBITDA
---------




Trailing Twelve
Months Ended
------------
December 31, 2012
-----------------
Operating
income 379,508
Other
(expense)
income (303)
Net
earnings
attributable
to
noncontrolling
interest (635)
Depreciation
and
amortization 280,293
------------ -------
EBITDA 658,863
Business
restructurings 18,564
--------------- ------
Adjusted
EBITDA 677,427
-------- -------


Net Debt
to
Adjusted
EBITDA 1.3
--------- ---




Reconciliation of Net Sales to Net Sales on a Constant Exchange Rate
(Amounts in thousands)
Three Months Ended Twelve Months Ended
------------------ -------------------
December December December December
31, 31, 31, 2012 31, 2011
2012 2011 --------- ---------
---- ----
Net sales $1,435,659 1,378,297 5,787,980 5,642,258
Adjustment to net
sales on a
constant
exchange rate 9,423 - 92,300 -
----------------- ----- --- ------ ---
Net sales on a
constant
exchange rate $1,445,082 1,378,297 5,880,280 5,642,258
-------------- ---------- --------- --------- ---------





Reconciliation of Segment Net Sales to Segment Net Sales on a
Constant Exchange Rate
(Amounts in thousands)
Three Months Ended
------------------
December 31, December
Dal-Tile 2012 31, 2011
-------- ------------- ---------
Net sales $401,637 348,541
Adjustment to segment net sales on a
constant exchange rate (1,635) -
------------------------------------ ------ ---
Segment net sales on a constant
exchange rate $400,002 348,541
------------------------------- -------- -------

Reconciliation of Segment Net Sales to Segment Net Sales on a
Constant Exchange Rate
(Amounts in thousands)
Three Months Ended
------------------
December 31, December
Unilin 2012 31, 2011
------ ------------- ---------
Net sales $329,969 326,321
Adjustment to segment net sales on a
constant exchange rate 11,058 -
------------------------------------ ------ ---
Segment net sales on a constant
exchange rate $341,027 326,321
------------------------------- -------- -------





Reconciliation of Operating Income to Adjusted Operating Income
(Amounts in thousands)

Three Months Ended
------------------
December 31, December
2012 31, 2011
Operating income $95,860 66,294
Operating lease
correction (2) - 6,035
Business
restructurings 6,109 7,696
--------------- ----- -----
Adjusted operating
income $101,969 80,025
------------------ -------- ------
Adjusted operating
margin as a percent
of net sales 7.1% 5.8%

Reconciliation of
Segment Operating
Income to Adjusted
Segment Operating
Income
(Amounts in
thousands)
Three Months Ended
------------------
December 31, December
Mohawk 2012 31, 2011
------ ------------- ---------
Operating income $51,968 30,687
Operating lease
correction (2) - 2,761
Business
restructurings - 7,696
--------------- --- -----
Adjusted segment
operating income $51,968 41,144
----------------- ------- ------
Adjusted operating
margin as a percent
of net sales 7.2% 5.7%

Reconciliation of
Segment Operating
Income to Adjusted
Segment Operating
Income
(Amounts in
thousands)
Three Months Ended
------------------
December 31, December
Dal-Tile 2012 31, 2011
-------- ------------- ---------
Operating income $21,039 18,387
Operating lease
correction (2) - 3,274
Business
restructurings 6,109 -
--------------- ----- ---
Adjusted segment
operating income $27,148 21,661
----------------- ------- ------
Adjusted operating
margin as a percent
of net sales 6.8% 6.2%

Reconciliation of
Segment Operating
Income to Adjusted
Segment Operating
Income
(Amounts in
thousands)
Three Months Ended
------------------
December 31, December
Unilin 2012 31, 2011
------ ------------- ---------
Operating income 29,796 21,640
Business
restructurings - -
--------------- --- ---
Adjusted segment
operating income $29,796 21,640
----------------- ------- ------
Adjusted operating
margin as a percent
of net sales 9.0% 6.6%





Twelve Months Ended
-------------------
December December
31, 31,
2012 2011
---- ----
Operating income 379,508 315,542
Operating lease
correction (2) - 6,035
Business
restructurings 18,564 23,209
---------------
Adjusted operating
income 398,072 344,786
------------------ ------- -------
Adjusted operating
margin as a percent
of net sales 6.9% 6.1%

Reconciliation of
Segment Operating
Income to Adjusted
Segment Operating
Income
(Amounts in
thousands)
Twelve Months Ended
-------------------
December December
Mohawk 31, 31,
------ 2012 2011
---- ----
Operating income 158,196 109,874
Operating lease
correction (2) - 2,761
Business
restructurings 10,504 23,209
--------------- ------ ------
Adjusted segment
operating income 168,700 135,844
----------------- ------- -------
Adjusted operating
margin as a percent
of net sales 5.8% 4.6%

Reconciliation of
Segment Operating
Income to Adjusted
Segment Operating
Income
(Amounts in
thousands)
Twelve Months Ended
-------------------
December December
Dal-Tile 31, 31,
-------- 2012 2011
---- ----
Operating income 120,951 101,298
Operating lease
correction (2) - 3,274
Business
restructurings 6,109 -
--------------- ----- ---
Adjusted segment
operating income 127,060 104,572
----------------- ------- -------
Adjusted operating
margin as a percent
of net sales 7.9% 7.2%

Reconciliation of
Segment Operating
Income to Adjusted
Segment Operating
Income
(Amounts in
thousands)
Twelve Months Ended
-------------------
December December
Unilin 31, 31,
------ 2012 2011
---- ----
Operating income 126,409 127,147
Business
restructurings 1,951 -
---------------
Adjusted segment
operating income 128,360 127,147
----------------- ------- -------
Adjusted operating
margin as a percent
of net sales 9.5% 9.5%





Reconciliation of Earnings Before Income Taxes to Adjusted Earnings
Before Income Taxes
(Amounts in thousands)
Three Months Ended
------------------
December 31, December 31,
2012 2011
------------- -------------
Earnings before income
taxes $79,092 41,907
Adjustments to earnings
before income taxes:
Operating lease
correction (2) - 6,035
Business restructurings 6,109 7,696
Adjusted earnings
before income taxes $85,201 55,638
-------------------- ------- ------

Reconciliation of Income Tax Expense to Adjusted Income Tax Expense
(Amounts in thousands)
Three Months Ended
------------------
December 31, December 31,
2012 2011
------------- -------------
Income tax expense $12,703 (1,990)
Income tax effect of
adjusting items 2,111 7,152
-------------------- ----- -----
Adjusted income tax
expense $14,814 5,162
------------------- ------- -----


Adjusted income tax
rate 17% 9%
------------------- --- ---

(1) Unrealized foreign currency losses in Q3 2011 for certain of the
Company's consolidated foreign subsidiaries that measure financial
position and results using the U.S. dollar rather than the local
currency.
(2) Correction of an immaterial error related to accounting for
operating leases
The Company believes it is useful for itself and investors to review,
as applicable, both GAAP and the above non-GAAP measures in order to
assess the performance of the Company's business for the planning and
forecasting in subsequent periods.



Mohawk Industries, Inc.


CONTACT: Frank H. Boykin, Chief Financial Officer, +1-706-624-2695


Web site: http://www.mohawkind.com/
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