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[April 2008]
Mohawk Industries Announces First Quarter Earnings
Mohawk Industries Inc (Calhoun, GA, USA) has announced 2008 first quarter net earnings of US$65 million and diluted earnings per share (EPS) of US$0.95 (both 28% below last year). Last year a US$9 million pre-tax refund (US$6 million after tax) from U.S. Customs was received and the company is still anticipating additional refunds. Net sales for the quarter were US$1.738 billion, a decrease of 6.7% from 2007. The balance sheet remained strong during the quarter with debt to capitalisation at 32% and debt to EBITDA at 2.3.
Commenting on the ceramic side of the business, Jeffrey Lorberbaum, Chairman and CEO, stated: "The Dal-Tile segment sales in the first quarter declined 3.8% which we believe outperformed the industry again. Strong growth in the commercial market is off-setting some of the weakness in the residential market. Our sales in Mexico and Canada have continued to expand as we increase our penetration in those markets.
“Our distribution system has been expanded with the opening of a new service center in Michigan and we have planned three to four more this year. Our sales force and new introductions are focusing on the better performing commercial, multi-family and higher end remodeling categories.
“Our ceramic price increase initiated in the fourth quarter is substantially implemented. In April, we are executing additional price increases on selected products and raising the energy surcharge to pass along increased costs. Cost reduction initiatives remain a priority concentrated on SG&A, manufacturing productivity, inventory management, freight and raw materials. Dal-Tile's new product 'Metro Leather' won the Dealer's Choice Award for the best new ceramic tile.”
On immediate prospects for the whole group, Jeffrey Lorberbaum commented: “Although seasonal improvements will benefit the second quarter, we expect to have many of the same challenges we faced during the first quarter. Weak demand and higher costs in the U.S. and Europe will weigh on our future results. We will adjust our business as changes in customer demand and costs require. Lower debt levels, reduced tax rates and beneficial exchange rates will positively affect our results. Based on these factors, our guidance for the second quarter of 2008 is $1.36 to $1.45. In spite of a difficult flooring market, Mohawk continues to modernize manufacturing facilities, create innovative products, and launch exciting advertising and promotional campaigns. We are positioned with a more dynamic and cost effective enterprise for the turn around that always occurs”.
www.mohawkind.com
ENDS