MOHAWK INDUSTRIES ANNOUNCES RECORD THIRD QUARTER EARNINGS

QUARTERLY ADJUSTED EPS 22% INCREASE OVER PRIOR YEAR



CALHOUN, Georgia, Nov. 5, 2015 /PRNewswire/ -- Mohawk Industries, Inc. today announced 2015 third quarter net earnings of $215 million and diluted earnings per share (EPS) of $2.89. Excluding restructuring and acquisition charges, net earnings were $222 million and EPS was $2.98, a 22% increase over last year's third quarter adjusted EPS and the highest adjusted quarterly EPS in the company's history. Net sales for the third quarter of 2015 were $2.2 billion, up 8% versus the prior year's third quarter or a 15% increase on a constant currency exchange rate basis. For the third quarter of 2014, net sales were $2.0 billion, net earnings were $151 million and EPS was $2.06; excluding restructuring and acquisition charges, net earnings were $179 million and EPS was $2.44.

For the nine months ending October 3, 2015, net sales were $6.1 billion, an increase of approximately 4% versus prior year or an increase of approximately 11% on a constant currency exchange rate basis. Net earnings and EPS for the nine-month period were $424 million and $5.73, respectively. Net earnings excluding restructuring and acquisition charges were $546 million and adjusted EPS was $7.38, an increase of 26% over the nine-month period adjusted EPS result in 2014. For the nine-months ending September 27, 2014, net sales were $5.9 billion, net earnings were $385 million and EPS was $5.25; excluding restructuring and acquisition charges, net earnings and EPS were $431 million and $5.88.

Commenting on Mohawk Industries' third quarter performance, Jeffrey S. Lorberbaum, Chairman and CEO, stated, "In addition to our record earnings per share, our adjusted operating income reached a record level at $309 million, up 30% over the same quarter last year. All segments contributed to our sales and operating income improvements. Our new segment structure that we announced last quarter has benefited our performance, enabling us to optimize our regional businesses by enhancing our product offerings, manufacturing assets and distribution strategies. During the period, we made significant progress in aligning our IVC acquisition with our European and U.S. flooring businesses and our KAI acquisition with our European ceramic operations. We are introducing products to take advantage of the unique capabilities and customer relationships of each organization. As we leverage the strength of these businesses, we anticipate greater market penetration and continued earnings growth in the future."

"For the quarter, our Global Ceramic segment sales were up 2% as reported. On a constant exchange rate basis, sales grew 11% and adjusted operating income rose 15% versus prior year with adjusted operating margin increasing to 15% as a result of improved productivity, volume, price and mix and the KAI acquisition partially offset by currency headwinds. Our U.S. ceramic sales continued to improve, as we increased our investments in new products, additional sales representatives and new service centers and galleries. The residential new construction sector remains the strongest part of our U.S. ceramic business. To satisfy increased demand in the U.S. market, we have begun importing ceramic tile from both our Russian and Bulgarian businesses, leveraging our global footprint to optimize our profitability. Growth in the Mexican ceramic market remains strong as we improved our position, and we are adding new sales representatives to expand our distribution base in all channels. In Europe, our ceramic sales are outpacing the market. We are benefiting from the upgraded assets at our manufacturing facilities, which are increasing our competitiveness and yielding more differentiated products, such as 3-dimensional wall tiles, hexagons and brick visuals. Our Bulgarian ceramic business is increasing its product mix, improving its manufacturing and expanding sales outside the local market. Though Russia is in a recession, we are increasing our share of the ceramic market. Our sales in Russia grew on a local basis, though our margin contracted as inflation outpaced our price increases.

"During the quarter, our Flooring North America segment's sales were up 8% over last year with adjusted operating income increasing 41%. The adjusted operating margin increased to almost 14% due to improved volume, productivity, input costs and the IVC acquisition partially offset by price and mix. The new structure of our North American carpet and hard surface businesses is improving our performance as we leverage the strength of our brands, marketing strategies and customer relationships across all categories. During the period, we increased our investments in sales personnel, merchandising and promotions in both carpet and hard surfaces categories to enhance our position in the marketplace. In our carpet business, we are beginning to see improved margin from our recent product introductions and the expansion of our Karastan customer base. Our commercial carpet margins continue to expand with the introduction of more stylized products, improved manufacturing efficiencies and enhanced service. We are improving our efficiency and reducing costs by closing two commercial carpet plants and consolidating the operations. Our rug sales and margins were up during the period as our new product introductions gained traction in the market. Sales of our hard surface products are growing faster than carpet across all channels, with builder and commercial sectors expanding the fastest. Our sheet vinyl and LVT sales continue to grow, and we are introducing new Mohawk branded products from IVC to expand our vinyl offering in all channels.

"For the quarter, our Flooring Rest of the World segment's sales rose 24% as reported or 41% on a constant exchange rate with adjusted operating income improving 48% over the prior year. The adjusted operating margin increased to almost 16% due to improved volume, input costs and the IVC acquisition partially offset by currency headwinds. Our laminate sales increased during the period, and our new product collection is one of our most successful ever due to its differentiated features and performance benefits such as our water resistant technology that is unique to the marketplace. Our wood sales improved along with our mix as we enhanced our Quick-Step and Pergo products with matt finishes, rustic visuals and brushed planks. Our vinyl business also improved with significant growth in LVT. We are introducing new LVT sizes with embossing, enhanced scratch resistance and superior click installation systems to add more value to our offering and participate in the commercial sector. As our Russian sheet vinyl business declined, we increased sales in other geographies to fully utilize our capacity. Our non-flooring product categories are up slightly with improving margins due to some relief in material costs. One of our chip board lines experienced an unplanned stop and will be down for four weeks, impacting operating income by approximately $3-4 million in our fourth quarter.

"Mohawk's performance benefited from strategic acquisitions, new investments in sales and operations and improved manufacturing and logistics. The U.S. residential and commercial flooring markets have improved throughout 2015, with hard surface sales growing faster. Looking to the fourth quarter, we anticipate that the U.S. economy will continue its gradual growth. We expect year-over-year margin growth to continue in all segments as a result of our strategies and acquisitions. We are selectively increasing our SG&A relative to sales to optimize future market share. Our recent acquisitions are being integrated into our businesses and are positively impacting our earnings. The costs associated with new plant start-ups, interruption of our board production and four fewer days will be absorbed in the period. Taking all these factors into account, our guidance for the fourth quarter is $2.66 - $2.75 per share, which would be a 17 -21% increase over 2014, excluding any restructuring charges. Our fourth quarter earnings guidance would have been approximately $0.15 per share higher on a constant exchange rate relative to last year."

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, Bigelow, Daltile, Durkan, IVC, Karastan, Lees, Marazzi, Mohawk, Pergo, Unilin and Quick-Step. 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, November 6, 2015 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 # 53645820. A replay will be available until Friday, December 4, 2015 by dialing 855-859-2056 for US/local calls and 404-537-3406 for International/Local calls and entering Conference ID # 53645820.


MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

(Unaudited)

Consolidated Statement of Operations Three Months Ended Nine Months Ended
------------------ -----------------

(Amounts in thousands, except per share data) October 3, 2015 September 27, 2014 October 3, 2015 September 27, 2014
--------------- ------------------ --------------- ------------------


Net sales $2,150,656 1,990,658 6,073,566 5,852,000

Cost of sales 1,489,252 1,434,236 4,285,090 4,239,411
--------- --------- --------- ---------

Gross profit 661,404 556,422 1,788,476 1,612,589

Selling, general and administrative expenses 372,670 342,729 1,200,152 1,045,913
-------------------------------------------- ------- ------- --------- ---------

Operating income 288,734 213,693 588,324 566,676

Interest expense 19,319 34,786 52,606 77,584

Other expense (income), net 4,249 (2,374) 6,094 961
--------------------------- ----- ------ ----- ---

Earnings before income taxes 265,166 181,281 529,624 488,131

Income tax expense 49,463 30,021 104,643 102,957
------------------ ------ ------ ------- -------

Net earnings including noncontrolling interest 215,703 151,260 424,981 385,174

Net earnings (loss) attributable to noncontrolling interest 798 (6) 1,238 77
------------------------------------------------------------ --- --- ----- ---

Net earnings attributable to Mohawk Industries, Inc. $214,905 151,266 423,743 385,097
-------- ------- ------- -------


Basic earnings per share attributable to Mohawk Industries, Inc.

Basic earnings per share attributable to Mohawk Industries, Inc. $2.91 2.08 5.77 5.29
---------------------------------------------------------------- ----- ---- ---- ----

Weighted-average common shares outstanding - basic 73,915 72,864 73,384 72,814
-------------------------------------------------- ------ ------ ------ ------


Diluted earnings per share attributable to Mohawk Industries, Inc.

Diluted earnings per share attributable to Mohawk Industries, Inc. $2.89 2.06 5.73 5.25
------------------------------------------------------------------ ----- ---- ---- ----

Weighted-average common shares outstanding - diluted 74,438 73,376 73,907 73,332
---------------------------------------------------- ------ ------ ------ ------




Other Financial Information

(Amounts in thousands)

Depreciation and amortization $94,955 85,167 268,622 249,905
----------------------------- ------- ------ ------- -------

Capital expenditures $123,648 141,883 352,070 391,580
-------------------- -------- ------- ------- -------


Consolidated Balance Sheet Data

(Amounts in thousands)

October 3, 2015 September 27, 2014
--------------- ------------------

ASSETS

Current assets:

Cash and cash equivalents $110,716 105,569

Receivables, net 1,340,650 1,209,557

Inventories 1,621,154 1,640,487

Prepaid expenses and other current assets 273,775 275,981

Deferred income taxes 152,899 137,220
--------------------- ------- -------

Total current assets 3,499,194 3,368,814

Property, plant and equipment, net 3,046,491 2,772,722

Goodwill 2,280,722 1,668,520

Intangible assets, net 918,655 746,304

Deferred income taxes and other non-current assets 319,420 145,100
-------------------------------------------------- ------- -------

Total assets $10,064,482 8,701,460
------------ ----------- ---------

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Current portion of long-term debt and commercial paper $1,927,815 583,495

Accounts payable and accrued expenses 1,371,969 1,247,862
------------------------------------- --------- ---------

Total current liabilities 3,299,784 1,831,357

Long-term debt, less current portion 1,263,176 1,806,821

Deferred income taxes and other long-term liabilities 723,489 486,764
----------------------------------------------------- ------- -------

Total liabilities 5,286,449 4,124,942
----------------- --------- ---------

Redeemable noncontrolling interest 22,150 -
---------------------------------- ------ ---

Total stockholders' equity 4,755,883 4,576,518
-------------------------- --------- ---------

Total liabilities and stockholders' equity $10,064,482 8,701,460
------------------------------------------ ----------- ---------


Segment Information Three Months Ended As of or for the Nine Months Ended
------------------ ----------------------------------

(Amounts in thousands) October 3, 2015 September 27, 2014 October 3, 2015 September 27, 2014
--------------- ------------------ --------------- ------------------


Net sales:

Global Ceramic $791,538 779,842 2,301,168 2,271,660

Flooring NA 955,099 886,317 2,722,347 2,562,560

Flooring ROW 404,026 326,146 1,050,390 1,021,951

Intersegment sales (7) (1,647) (339) (4,171)
------------------ --- ------ ---- ------

Consolidated net sales $2,150,656 1,990,658 6,073,566 5,852,000
---------------------- ---------- --------- --------- ---------


Operating income (loss):

Global Ceramic $120,055 101,254 326,571 268,320

Flooring NA 125,910 83,623 145,861 207,578

Flooring ROW 55,471 35,046 153,164 113,909

Corporate and eliminations (12,702) (6,230) (37,272) (23,131)
-------------------------- ------- ------ ------- -------

Consolidated operating income $288,734 213,693 588,324 566,676
----------------------------- -------- ------- ------- -------


Assets:

Global Ceramic $3,938,242 3,788,164

Flooring NA 3,195,904 2,641,171

Flooring ROW 2,699,255 2,033,718

Corporate and eliminations 231,081 238,407
-------------------------- ------- -------

Consolidated assets $10,064,482 8,701,460
------------------- ----------- ---------




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 Nine Months Ended
------------------ -----------------

October 3, 2015 September 27, 2014 October 3, 2015 September 27, 2014
--------------- ------------------ --------------- ------------------

Net earnings attributable to Mohawk Industries, Inc. $214,905 151,266 423,743 385,097

Adjusting items:

Restructuring, acquisition and integration-related and other costs 12,770 14,013 43,784 36,907

Acquisitions purchase accounting (inventory step-up) 7,160 - 13,316 -

Legal settlement and reserves - 10,000 127,000 10,000

Bond redemption - 15,450 - 15,450

Deferred loan costs - 1,080 651 1,080

Income taxes (12,940) (12,792) (62,984) (17,412)
------------ ------- ------- ------- -------

Adjusted net earnings attributable to Mohawk Industries, Inc. $221,895 179,017 545,510 431,122
------------------------------------------------------------- -------- ------- ------- -------


Adjusted diluted earnings per share attributable to Mohawk Industries, Inc. $2.98 2.44 7.38 5.88

Weighted-average common shares outstanding - diluted 74,438 73,376 73,907 73,332




Reconciliation of Total Debt to Net Debt

(Amounts in thousands)

October 3, 2015
---------------

Current portion of long-term debt and commercial paper $1,927,815

Long-term debt, less current portion 1,263,176

Less: Cash and cash equivalents 110,716
------------------------------- -------

Net Debt $3,080,275
-------- ----------


Reconciliation of Operating Income to Adjusted EBITDA

(Amounts in thousands) Trailing Twelve

Three Months Ended Months Ended
------------------

December 31, 2014 April 4, 2015 July 4, 2015 October 3, 2015 October 3, 2015
----------------- ------------- ------------ --------------- ---------------

Operating income $206,120 43,774 255,816 288,734 794,444

Other (expense) income (9,737) 1,083 (2,928) (4,249) (15,831)

Net (earnings) loss attributable to non-controlling interest (212) (158) (282) (798) (1,450)

Depreciation and amortization 95,665 85,656 88,011 94,955 364,287
------ ------ ------ ------ -------

EBITDA 291,836 130,355 340,617 378,642 1,141,450

Restructuring, acquisition and integration-related and other costs 21,859 8,169 17,275 11,690 58,993

Acquisitions purchase accounting (inventory step-up) - - 6,156 7,160 13,316

Legal settlement and reserves - 125,000 - - 125,000
----------------------------- --- ------- --- --- -------

Adjusted EBITDA $313,695 263,524 364,048 397,492 1,338,759
--------------- -------- ------- ------- ------- ---------


Net Debt to Adjusted EBITDA 2.3
---------------------------- ---


Reconciliation of Net Sales to Net Sales on a Constant Exchange Rate

(Amounts in thousands)

Three Months Ended Nine Months Ended
------------------ -----------------

October 3, 2015 September 27, 2014 October 3, 2015 September 27, 2014
--------------- ------------------ --------------- ------------------

Net sales $2,150,656 1,990,658 6,073,566 5,852,000

Adjustment to net sales on a constant exchange rate 131,068 - 408,745 -
--------------------------------------------------- ------- --- ------- ---

Net sales on a constant exchange rate $2,281,724 1,990,658 6,482,311 5,852,000
------------------------------------- ---------- --------- --------- ---------



Reconciliation of 2015 Net Sales to Pro Forma Net Sales on a Constant Exchange Rate Excluding 2015 Q3 Acquisition Volume

(Amounts in thousands)

Three Months Ended
------------------

October 3, 2015 September 27, 2014
--------------- ------------------

Net sales $2,150,656 1,990,658

Adjustment to net sales on a constant exchange rate 131,068 -

Less: 2015 Q3 impact of acquisition volume (178,560) -
------------------------------------------ -------- ---

2015 pro forma net sales on a constant exchange rate excluding acquisition volume $2,103,164 1,990,658
--------------------------------------------------------------------------------- ---------- ---------


Reconciliation of Segment Net Sales to Segment Net Sales on a Constant Exchange Rate

(Amounts in thousands)

Three Months Ended
------------------

Global Ceramic October 3, 2015 September 27, 2014
-------------- --------------- ------------------

Net sales $791,538 779,842

Adjustment to segment net sales on a constant exchange rate 75,785 -
----------------------------------------------------------- ------ ---

Segment net sales on a constant exchange rate $867,323 779,842
--------------------------------------------- -------- -------


Reconciliation of 2015 Segment Net Sales to Segment Pro Forma Net Sales on a Constant Exchange Rate Excluding 2015 Q3 Acquisition Volume

(Amounts in thousands)

Three Months Ended
------------------

Global Ceramic October 3, 2015 September 27, 2014
--------------- ------------------

Net sales $791,538 779,842

Adjustment to segment net sales on a constant exchange rate 75,785 -

Less: 2015 Q3 impact of acquisition volume (26,827) -
------------------------------------------ ------- ---

2015 segment pro forma net sales on a constant exchange rate excluding acquisition volume $840,496 779,842
----------------------------------------------------------------------------------------- -------- -------




Reconciliation of 2015 Segment Net Sales to Segment Pro Forma Net Sales on a Constant Exchange Rate Excluding 2015 Q3 Acquisition Volume

(Amounts in thousands)

Three Months Ended
------------------

Flooring NA October 3, 2015 September 27, 2014
----------- --------------- ------------------

Net sales $955,099 886,317

Adjustment to segment net sales on a constant exchange rate - -

Less: 2015 Q3 impact of acquisition volume (37,779) -
------------------------------------------ ------- ---

2015 segment pro forma net sales on a constant exchange rate excluding acquisition volume $917,320 886,317
----------------------------------------------------------------------------------------- -------- -------





Reconciliation of Segment Net Sales to Segment Net Sales on a Constant Exchange Rate

(Amounts in thousands)

Three Months Ended
------------------

Flooring ROW October 3, 2015 September 27, 2014
------------ --------------- ------------------

Net sales $404,026 326,146

Adjustment to segment net sales on a constant exchange rate 55,283 -
----------------------------------------------------------- ------ ---

Segment net sales on a constant exchange rate $459,309 326,146
--------------------------------------------- -------- -------



Reconciliation of 2015 Segment Net Sales to Pro Forma Segment Net Sales on a Constant Exchange Rate Excluding 2015 Q3 Acquisition Volume

(Amounts in thousands)

Three Months Ended
------------------

Flooring ROW October 3, 2015 September 27, 2014
------------ --------------- ------------------

Net sales $404,026 326,146

Adjustment to segment net sales on a constant exchange rate 55,283 -

Less: 2015 Q3 impact of acquisition volume (113,955) -
------------------------------------------ -------- ---

2015 Segment Pro forma net sales on a constant exchange rate excluding acquisition volume $345,354 326,146
----------------------------------------------------------------------------------------- -------- -------




Reconciliation of Gross Profit to Adjusted Gross Profit

(Amounts in thousands)

Three Months Ended
------------------

October 3, 2015 September 27, 2014
--------------- ------------------

Gross Profit $661,404 556,422

Adjustments to gross profit:

Restructuring, acquisition and integration-related and other costs 7,291 7,261

Acquisitions purchase accounting (inventory step-up) 7,160 -
--------------------------------------------------- ----- ---

Adjusted gross profit $675,855 563,683
--------------------- -------- -------

Adjusted gross profit as a percent of net sales 31.4% 28.3%


Reconciliation of Selling, General and Administrative Expenses to Adjusted Selling, General and Administrative Expenses

(Amounts in thousands)

Three Months Ended
------------------

October 3, 2015 September 27, 2014
--------------- ------------------

Selling, general and administrative expenses $372,670 342,729

Adjustment to selling, general and administrative expenses:

Restructuring, acquisition and integration-related and other costs (5,479) (6,752)

Legal settlement and reserves - (10,000)
----------------------------- --- -------

Adjusted selling, general and administrative expenses $367,191 325,977
----------------------------------------------------- -------- -------

Adjusted selling, general and administrative expenses as a percent of net sales 17.1% 16.4%


Reconciliation of Operating Income to Adjusted Operating Income

(Amounts in thousands)

Three Months Ended
------------------

October 3, 2015 September 27, 2014
--------------- ------------------

Operating income $288,734 213,693

Adjustments to operating income:

Restructuring, acquisition and integration-related and other costs 12,770 14,013

Legal settlement and reserves - 10,000

Acquisitions purchase accounting (inventory step-up) 7,160 -
--------------------------------------------------- ----- ---

Adjusted operating income $308,664 237,706
------------------------- -------- -------

Adjusted operating income as a percent of net sales 14.4% 11.9%


Reconciliation of Adjusted Operating Income on a Constant Exchange Rate

(Amounts in thousands)

Three Months Ended
------------------

October 3, 2015 September 27, 2014
--------------- ------------------

Operating income $288,734 213,693

Adjustments to operating income:

Restructuring, acquisition and integration-related and other costs 12,770 14,013

Legal settlement and reserves - 10,000

Acquisitions purchase accounting (inventory step-up) 7,160 -

Adjustments to operating income on a constant exchange rate 21,392 -
----------------------------------------------------------- ------ ---

Adjusted operating income on constant exchange rate $330,056 237,706
--------------------------------------------------- -------- -------


Reconciliation of Segment Operating Income to Adjusted Segment Operating Income

(Amounts in thousands)

Three Months Ended
------------------

Global Ceramic October 3, 2015 September 27, 2014
-------------- --------------- ------------------

Operating income $120,055 101,254

Adjustments to segment operating income:

Restructuring, acquisition and integration-related and other costs 118 4,248

Acquisitions purchase accounting (inventory step-up) 949 -
--------------------------------------------------- --- ---

Adjusted segment operating income $121,122 105,502
--------------------------------- -------- -------

Adjusted operating income as a percent of net sales 15.3% 13.5%


Reconciliation of Segment Operating Income to Adjusted Segment Operating Income on a Constant Exchange Rate

(Amounts in thousands)

Three Months Ended
------------------

Global Ceramic October 3, 2015 September 27, 2014
-------------- --------------- ------------------

Operating income $120,055 101,254

Adjustments to segment operating income:

Restructuring, acquisition and integration-related and other costs 118 4,248

Acquisitions purchase accounting (inventory step-up) 949 -

Adjustments to operating income on a constant exchange rate 12,701 -
----------------------------------------------------------- ------ ---

Adjusted segment operating income on constant exchange rate $133,823 105,502
------------------------------------------------------------ -------- -------


Reconciliation of Segment Operating Income to Adjusted Segment Operating Income

(Amounts in thousands)

Three Months Ended
------------------

Flooring NA October 3, 2015 September 27, 2014
----------- --------------- ------------------

Operating income $125,910 83,623

Adjustments to segment operating income:

Restructuring, acquisition and integration-related and other costs 5,148 10,578

Acquisitions purchase accounting (inventory step-up) 1,527 -
--------------------------------------------------- ----- ---

Adjusted segment operating income $132,585 94,201
--------------------------------- -------- ------

Adjusted operating income as a percent of net sales 13.9% 10.6%



Reconciliation of Segment Operating Income to Adjusted Segment Operating Income

(Amounts in thousands)

Three Months Ended
------------------

Flooring ROW October 3, 2015 September 27, 2014
------------ --------------- ------------------

Operating income $55,471 35,046

Adjustment to segment operating income:

Restructuring, acquisition and integration-related and other costs 4,030 8,437

Acquisitions purchase accounting (inventory step-up) 4,683 -
--------------------------------------------------- ----- ---

Adjusted segment operating income $64,184 43,483
--------------------------------- ------- ------

Adjusted operating income as a percent of net sales 15.9% 13.3%


Reconciliation of Segment Operating Income to Adjusted Segment Operating Income on a Constant Exchange Rate

(Amounts in thousands)

Three Months Ended
------------------

Flooring ROW October 3, 2015 September 27, 2014
------------ --------------- ------------------

Operating income $55,471 35,046

Adjustment to segment operating income:

Restructuring, acquisition and integration-related and other costs 4,030 8,437

Acquisitions purchase accounting (inventory step-up) 4,683 -

Adjustments to operating income on a constant exchange rate 8,691 -
----------------------------------------------------------- ----- ---

Adjusted segment operating income on constant exchange rate $72,875 43,483
----------------------------------------------------------- ------- ------



Reconciliation of Earnings from Continuing Operations Including Noncontrolling Interest Before Income Taxes to Adjusted Earnings from Continuing Operations Including Noncontrolling Interest Before Income Taxes

(Amounts in thousands)

Three Months Ended
------------------

October 3, 2015 September 27, 2014
--------------- ------------------

Earnings before income taxes $265,166 181,281

Noncontrolling interest (798) 6

Adjustments to earnings from continuing operations before income taxes:

Restructuring, acquisition and integration-related and other costs 12,770 14,013

Acquisitions purchase accounting (inventory step-up) 7,160 -

Legal settlement and reserves - 10,000

Bond redemption - 15,450

Deferred loan costs - 1,080
------------------- --- -----

Adjusted earnings before income taxes $284,298 221,830
------------------------------------- -------- -------



Reconciliation of Income Tax Expense to Adjusted Income Tax Expense

(Amounts in thousands)

Three Months Ended
------------------

October 3, 2015 September 27, 2014
--------------- ------------------

Income tax expense $49,463 30,021

Income tax effect of adjusting items 12,940 12,792
------------------------------------ ------ ------

Adjusted income tax expense $62,403 42,813
--------------------------- ------- ------


Adjusted income tax rate 21.9% 19.3%
------------------------ ---- ----




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 planning and forecasting in subsequent periods. In particular, the Company believes excluding the impact of restructuring, acquisition, integration-related and other costs, legal settlement and reserves,
and acquisitions purchase accounting (inventory step-up) is useful because it allows investors to evaluate our performance for different periods on a more comparable basis.






Mohawk Industries, Inc.


CONTACT: Frank H. Boykin, Chief Financial Officer, (706) 624-2695


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

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