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[Nov 2006]
Mohawk Industries Announces Third Quarter Earnings
Mohawk Industries Inc (Calhoun, GA, USA) has announced 2006 third quarter net earnings of US$127.71 million and diluted earnings per share (EPS) of US$1.88 (both 10% above last year), in accordance with U.S. Generally Accepted Accounting Principles (GAAP).
Adjusted net earnings for the third quarter of 2006 were US$123.95 million and adjusted EPS were US$1.82 per share. The adjusted net earnings exclude a stock option charge that was not required in 2005 increasing net earnings by US$1.855 million and exclude a partially-paid refund from U.S. Customs decreasing net earnings by US$5.615 million. Net sales for the quarter were US$2.024 billion, an increase of 19% from 2005. The sales growth resulted from the Unilin acquisition, hard surface sales growth and price increases.
In commenting on the quarter results, Jeffrey Lorberbaum, Chairman and CEO,
stated: "I am pleased with our results for the quarter in light of the current business environment. With 19% sales growth, higher gross margins and a 10% improvement in EPS over last year, our third quarter was positive. Our business is better balanced to minimize the impact of changing economic and industry cycles than in the past. The diversification of our product offering with a full line of soft and hard products, participation in all sales channels of residential and commercial, and our broader geographic exposure in Europe improve our position.During the quarter the slowing U.S. economy impacted our business. Both residential replacement and new residential construction weakened through the quarter and the commercial business continued positive trends. Raw material costs increased in the third quarter and remained high even though oil costs declined. A stronger European economy and improved U.S. laminate sales have benefited our business. We see weaker industry demand levels with the postponement of new home purchases and redecorating projects in the near term. Recent changes in gasoline prices have positively affected consumers and some retail categories. This could improve large discretionary purchases and positively affect retail flooring sales. Interest rates should remain favorable, consumer confidence should recover, and the industry demand for flooring should improve in the long term...
"...Our Dal-Tile segment sales had solid performance growing 11% during the quarter. Even with slowing industry growth, we anticipate increasing our share due to prior investments in sales, product, and distribution. Our margins were impacted by the start up expenses of our Oklahoma expansion and increased transportation costs. We anticipate transportation costs improving as gasoline costs decline. The start up phase of the Oklahoma facility is complete and the plant is expected to be operating near capacity by year-end. Our ceramic business is well positioned to grow faster than the industry."
www.mohawkind.com
ENDS