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[August 2006]
Dal-Tile Contributes to Good Second Quarter for Mohawk
Mohawk Industries Inc (Calhoun, GA, USA) has announced 2006 second quarter net earnings of US$119.513 million (22% above last year) and diluted earnings per share (EPS) of US$1.76 (21% above last year), in accordance with U.S. Generally Accepted Accounting Principles (GAAP).
Adjusted net earnings for Q2/2006 were US$117.714 million and adjusted EPS were US$1.73 per share. The adjusted net earnings exclude a stock option charge that was not required in 2005 increasing net earnings by US$2.104 million and exclude income for a portion of a one-time refund received from US Customs decreasing net earnings by US$3.903 million. Net sales for the quarter were US$2.0581 billion, an increase of 27% from 2005. The growth resulted from the Unilin acquisition, total hard surface sales growth, internal growth, price increases and new patent licences. Mohawk changed its method of accounting for soft surface inventories from LIFO to FIFO during the second quarter of 2006. If Mohawk had continued on LIFO, then net earnings for the second quarter would have been slightly higher. All prior period amounts have been revised to reflect this change.In commenting on the quarter results, Jeffrey Lorberbaum, Chairman and CEO, stated: "I am pleased with our second quarter performance, especially in light of the economic and industry factors we are facing. Hard surface growth and higher selling prices positively affected our sales while replacement demand for carpet remains slow. The change from LIFO to FIFO inventory accounting removes some uncertainty in predicting future results. Our Unilin integration is progressing as planned. We expect to benefit from the many capital projects recently completed and the introduction of Mohawk-branded laminate in the future".
On ceramic tile, Mr Lorberbaum said: "Our Dal-Tile segment second quarter sales were strong as revenues grew 15% over 2005 from both volume and price increases. We had higher than normal product introductions, absorbed start-up costs in the Oklahoma ceramic facility, and had higher energy and transportation costs. The Mexican ceramic expansion was completed in the first quarter of the year and is running as planned. The Oklahoma expansion started production at the end of the second quarter. These capacity expansions will support our expected future growth and allow us to produce a greater portion of our sales requirements".
He added that Dal-Tile investments in sales and marketing should support future growth in market share.
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ENDS