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[August 2007]
Mohawk Industries Announces Second Quarter Earnings
Dal-Tile's parent company Mohawk Industries Inc (Calhoun, GA, USA) has announced 2007 second quarter net earnings of US$115 million and diluted earnings per share (EPS) of US$1.68 (both 4% below last year). Net sales for the quarter were US$1.977 billion, a decrease of 4% from 2006. During the quarter the company had strong cash flow from operations of US$226 million and EBITDA of US$276 million. In addition, debt of US$208 million was paid down during the quarter, reducing the company debt to capital ratio to 38%.For the first half of 2007, net earnings were US$206 million and EPS was US$3.01 (both 3% above last year). Net sales for the first half of 2007 were US$3.841 billion representing a 4% decrease from 2006. The sales decreases for both the quarter and the year to date are attributable to slowing U.S. industry demand in the residential new construction and redecorating business.
On ceramic tile, the company said: "The Dal-Tile segment sales for the quarter were slightly below last year. We believe we are performing better than market due to the earlier investments made in sales, products and marketing. Commercial sales are offsetting some of the weakness in residential. Selected price increases were implemented in the quarter and surcharges are being applied to cover increased transportation and energy costs.
“We are reducing our controllable costs but margins are lower due to infrastructure investments in distribution and sales personnel to maximize sales and unabsorbed overhead from lower production schedules. Our Dal-Tile team is implementing multiple initiatives to reduce costs, improve efficiency and manage working capital. We are increasing production as we continue to shift products to our own facilities which were previously sourced externally.”
Overall, the company expects the U.S. residential environment to continue to be difficult during the third quarter. The management team said it was committed to maintaining the proper balance between cost cutting and being prepared for a future turnaround. Based on these factors, the guidance for the third quarter of 2007 is US$1.61 to US$1.70 EPS.
www.mohawkind.com
ENDS