Delaware | 01-13697 | 52-1604305 | ||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
160 South Industrial Blvd., Calhoun, Georgia | 30701 | |||
(Address of Principal Executive Offices) | (Zip Code) |
Mohawk Industries, Inc. | ||||||
Date: | October 26, 2017 | By: | /s/ James F. Brunk | |||
James F. Brunk | ||||||
V.P. & Corporate Controller |
Exhibit | |||
99.1 |
NEWS RELEASE |
MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES | |||||||||||||
(Unaudited) | |||||||||||||
Consolidated Statement of Operations Data | Three Months Ended | Nine Months Ended | |||||||||||
(Amounts in thousands, except per share data) | September 30, 2017 | October 1, 2016 | September 30, 2017 | October 1, 2016 | |||||||||
Net sales | $ | 2,448,510 | 2,294,139 | 7,122,193 | 6,776,521 | ||||||||
Cost of sales | 1,665,209 | 1,567,580 | 4,879,403 | 4,654,695 | |||||||||
Gross profit | 783,301 | 726,559 | 2,242,790 | 2,121,826 | |||||||||
Selling, general and administrative expenses | 403,203 | 348,252 | 1,232,083 | 1,147,155 | |||||||||
Operating income | 380,098 | 378,307 | 1,010,707 | 974,671 | |||||||||
Interest expense | 7,259 | 9,410 | 23,854 | 32,062 | |||||||||
Other expense (income), net | 1,285 | 3,839 | 1,455 | 1,461 | |||||||||
Earnings before income taxes | 371,554 | 365,058 | 985,398 | 941,148 | |||||||||
Income tax expense | 100,532 | 94,231 | 251,572 | 242,090 | |||||||||
Net earnings including noncontrolling interest | 271,022 | 270,827 | 733,826 | 699,058 | |||||||||
Net income attributable to noncontrolling interest | 997 | 949 | 2,566 | 2,444 | |||||||||
Net earnings attributable to Mohawk Industries, Inc. | $ | 270,025 | 269,878 | 731,260 | 696,614 | ||||||||
Basic earnings per share attributable to Mohawk Industries, Inc. | |||||||||||||
Basic earnings per share attributable to Mohawk Industries, Inc. | $ | 3.63 | 3.64 | 9.84 | 9.40 | ||||||||
Weighted-average common shares outstanding - basic | 74,338 | 74,154 | 74,330 | 74,084 | |||||||||
Diluted earnings per share attributable to Mohawk Industries, Inc. | |||||||||||||
Diluted earnings per share attributable to Mohawk Industries, Inc. | $ | 3.61 | 3.62 | 9.77 | 9.34 | ||||||||
Weighted-average common shares outstanding - diluted | 74,841 | 74,613 | 74,830 | 74,551 |
Other Financial Information | |||||||||||||
(Amounts in thousands) | |||||||||||||
Depreciation and amortization | $ | 113,515 | 103,680 | 328,300 | 305,088 | ||||||||
Capital expenditures | $ | 229,207 | 183,846 | 654,630 | 460,760 |
Consolidated Balance Sheet Data | |||||||
(Amounts in thousands) | |||||||
September 30, 2017 | October 1, 2016 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 84,502 | 112,108 | ||||
Receivables, net | 1,656,064 | 1,506,316 | |||||
Inventories | 1,911,029 | 1,673,242 | |||||
Prepaid expenses and other current assets | 345,515 | 284,648 | |||||
Total current assets | 3,997,110 | 3,576,314 | |||||
Property, plant and equipment, net | 4,090,099 | 3,340,893 | |||||
Goodwill | 2,454,360 | 2,331,821 | |||||
Intangible assets, net | 890,298 | 876,715 | |||||
Deferred income taxes and other non-current assets | 390,946 | 294,850 | |||||
Total assets | $ | 11,822,813 | 10,420,593 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Current portion of long-term debt and commercial paper | $ | 1,172,781 | 1,548,251 | ||||
Accounts payable and accrued expenses | 1,524,237 | 1,435,069 | |||||
Total current liabilities | 2,697,018 | 2,983,320 | |||||
Long-term debt, less current portion | 1,544,665 | 1,165,577 | |||||
Deferred income taxes and other long-term liabilities | 755,020 | 574,267 | |||||
Total liabilities | 4,996,703 | 4,723,164 | |||||
Redeemable noncontrolling interest | 28,508 | 24,741 | |||||
Total stockholders' equity | 6,797,602 | 5,672,688 | |||||
Total liabilities and stockholders' equity | $ | 11,822,813 | 10,420,593 |
Segment Information | Three Months Ended | As of or for the Nine Months Ended | ||||||||||||
(Amounts in thousands) | September 30, 2017 | October 1, 2016 | September 30, 2017 | October 1, 2016 | ||||||||||
Net sales: | ||||||||||||||
Global Ceramic | $ | 893,399 | 822,040 | 2,581,038 | 2,425,560 | |||||||||
Flooring NA | 1,031,773 | 1,008,553 | 3,011,568 | 2,895,610 | ||||||||||
Flooring ROW | 523,338 | 463,546 | 1,529,587 | 1,455,351 | ||||||||||
Intersegment sales | — | — | — | — | ||||||||||
Consolidated net sales | $ | 2,448,510 | 2,294,139 | 7,122,193 | 6,776,521 | |||||||||
Operating income (loss): | ||||||||||||||
Global Ceramic | $ | 143,368 | 135,985 | 411,961 | 376,368 | |||||||||
Flooring NA | 163,494 | 170,507 | 383,118 | 364,804 | ||||||||||
Flooring ROW | 83,042 | 81,757 | 245,189 | 262,356 | ||||||||||
Corporate and intersegment eliminations | (9,806 | ) | (9,942 | ) | (29,561 | ) | (28,857 | ) | ||||||
Consolidated operating income | $ | 380,098 | 378,307 | 1,010,707 | 974,671 | |||||||||
Assets: | ||||||||||||||
Global Ceramic | $ | 4,826,619 | 4,118,510 | |||||||||||
Flooring NA | 3,699,633 | 3,354,286 | ||||||||||||
Flooring ROW | 3,128,213 | 2,851,227 | ||||||||||||
Corporate and intersegment eliminations | 168,348 | 96,570 | ||||||||||||
Consolidated assets | $ | 11,822,813 | 10,420,593 |
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 | |||||||||||
September 30, 2017 | October 1, 2016 | September 30, 2017 | October 1, 2016 | |||||||||
Net earnings attributable to Mohawk Industries, Inc. | $ | 270,025 | 269,878 | 731,260 | 696,614 | |||||||
Adjusting items: | ||||||||||||
Restructuring, acquisition and integration-related and other costs | 13,853 | 30,572 | 33,709 | 44,309 | ||||||||
Acquisitions purchase accounting, including inventory step-up | 3,551 | — | 13,314 | — | ||||||||
Legal settlement and reserves | — | (90,000 | ) | — | (90,000 | ) | ||||||
Release of indemnification asset | — | 2,368 | — | 2,368 | ||||||||
Tradename impairment | — | 47,905 | — | 47,905 | ||||||||
Income taxes - reversal of uncertain tax position | — | (2,368 | ) | — | (2,368 | ) | ||||||
Income taxes | (6,545 | ) | 2,856 | (15,637 | ) | (1,764 | ) | |||||
Adjusted net earnings attributable to Mohawk Industries, Inc. | $ | 280,884 | 261,211 | 762,646 | 697,064 | |||||||
Adjusted diluted earnings per share attributable to Mohawk Industries, Inc. | $ | 3.75 | 3.50 | 10.19 | 9.35 | |||||||
Weighted-average common shares outstanding - diluted | 74,841 | 74,613 | 74,830 | 74,551 |
Reconciliation of Total Debt to Net Debt | |||
(Amounts in thousands) | |||
September 30, 2017 | |||
Current portion of long-term debt and commercial paper | $ | 1,172,781 | |
Long-term debt, less current portion | 1,544,665 | ||
Less: Cash and cash equivalents | 84,502 | ||
Net Debt | $ | 2,632,944 |
Reconciliation of Operating Income to Adjusted EBITDA | ||||||||||||||||
(Amounts in thousands) | Trailing Twelve | |||||||||||||||
Three Months Ended | Months Ended | |||||||||||||||
December 31, 2016 | April 1, 2017 | July 1, 2017 | September 30, 2017 | September 30, 2017 | ||||||||||||
Operating income | $ | 305,272 | 274,784 | 355,825 | 380,098 | 1,315,979 | ||||||||||
Other (expense) income | 3,190 | 2,832 | (3,002 | ) | (1,285 | ) | 1,735 | |||||||||
Net (income) loss attributable to noncontrolling interest | (760 | ) | (502 | ) | (1,067 | ) | (997 | ) | (3,326 | ) | ||||||
Depreciation and amortization | 104,379 | 105,024 | 109,761 | 113,515 | 432,679 | |||||||||||
EBITDA | 412,081 | 382,138 | 461,517 | 491,331 | 1,747,067 | |||||||||||
Restructuring, acquisition and integration-related and other costs | 16,214 | 3,978 | 15,878 | 13,853 | 49,923 | |||||||||||
Acquisitions purchase accounting, including inventory step-up | — | 192 | 9,571 | 3,551 | 13,314 | |||||||||||
Release of indemnification asset | 3,004 | — | — | — | 3,004 | |||||||||||
Adjusted EBITDA | $ | 431,299 | 386,308 | 486,966 | 508,735 | 1,813,308 | ||||||||||
Net Debt to Adjusted EBITDA | 1.5 |
Reconciliation of Net Sales to Net Sales on a Constant Exchange Rate and Constant Shipping Days Excluding Acquisition Volume | ||||||||||||
(Amounts in thousands) | ||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||
September 30, 2017 | October 1, 2016 | September 30, 2017 | October 1, 2016 | |||||||||
Net sales | $ | 2,448,510 | 2,294,139 | 7,122,193 | 6,776,521 | |||||||
Adjustment to net sales on constant shipping days | 1,111 | — | 36,358 | — | ||||||||
Adjustment to net sales on a constant exchange rate | (39,769 | ) | — | (9,234 | ) | — | ||||||
Net sales on a constant exchange rate and constant shipping days | 2,409,852 | 2,294,139 | 7,149,317 | 6,776,521 | ||||||||
Less: impact of acquisition volume | (47,118 | ) | — | (95,342 | ) | — | ||||||
Net sales on a constant exchange rate and constant shipping days excluding acquisition volume | $ | 2,362,734 | 2,294,139 | 7,053,975 | 6,776,521 |
Reconciliation of Segment Net Sales to Segment Net Sales on a Constant Exchange Rate and Shipping Days Excluding Acquisition Volume | |||||||
(Amounts in thousands) | |||||||
Three Months Ended | |||||||
Global Ceramic | September 30, 2017 | October 1, 2016 | |||||
Net sales | $ | 893,399 | 822,040 | ||||
Adjustment to net sales on constant shipping days | 1,111 | — | |||||
Adjustment to segment net sales on a constant exchange rate | (16,758 | ) | — | ||||
Segment net sales on a constant exchange rate and constant shipping days | $ | 877,752 | 822,040 | ||||
Less: impact of acquisition volume | (47,118 | ) | — | ||||
Segment net sales on a constant exchange rate and constant shipping days excluding acquisition volume | $ | 830,634 | 822,040 |
Reconciliation of Segment Net Sales to Segment Net Sales on a Constant Exchange Rate | |||||||
(Amounts in thousands) | |||||||
Three Months Ended | |||||||
Flooring ROW | September 30, 2017 | October 1, 2016 | |||||
Net sales | $ | 523,338 | 463,546 | ||||
Adjustment to segment net sales on a constant exchange rate | (23,012 | ) | — | ||||
Segment net sales on a constant exchange rate | $ | 500,326 | 463,546 |
Reconciliation of Gross Profit to Adjusted Gross Profit | |||||||
(Amounts in thousands) | |||||||
Three Months Ended | |||||||
September 30, 2017 | October 1, 2016 | ||||||
Gross Profit | $ | 783,301 | 726,559 | ||||
Adjustments to gross profit: | |||||||
Restructuring, acquisition and integration-related and other costs | 8,845 | 17,459 | |||||
Acquisitions purchase accounting, including inventory step-up | 3,551 | — | |||||
Adjusted gross profit | $ | 795,697 | 744,018 |
Reconciliation of Selling, General and Administrative Expenses to Adjusted Selling, General and Administrative Expenses | |||||||
(Amounts in thousands) | |||||||
Three Months Ended | |||||||
September 30, 2017 | October 1, 2016 | ||||||
Selling, general and administrative expenses | $ | 403,203 | 348,252 | ||||
Adjustments to selling, general and administrative expenses: | |||||||
Restructuring, acquisition and integration-related and other costs | (5,008 | ) | (13,112 | ) | |||
Legal settlement and reserves | — | 90,000 | |||||
Tradename impairment | — | (47,905 | ) | ||||
Adjusted selling, general and administrative expenses | $ | 398,195 | 377,235 |
Reconciliation of Operating Income to Adjusted Operating Income | ||||||||
(Amounts in thousands) | ||||||||
Three Months Ended | ||||||||
September 30, 2017 | October 1, 2016 | |||||||
Operating income | $ | 380,098 | 378,307 | |||||
Adjustments to operating income: | ||||||||
Restructuring, acquisition and integration-related and other costs | 13,853 | 30,572 | ||||||
Legal settlement and reserves | — | (90,000 | ) | |||||
Tradename impairment | — | 47,905 | ||||||
Acquisitions purchase accounting, including inventory step-up | 3,551 | — | ||||||
Adjusted operating income | $ | 397,502 | $ | 366,784 |
Reconciliation of Segment Operating Income to Adjusted Segment Operating Income | |||||||
(Amounts in thousands) | |||||||
Three Months Ended | |||||||
Global Ceramic | September 30, 2017 | October 1, 2016 | |||||
Operating income | $ | 143,368 | 135,985 | ||||
Adjustments to segment operating income: | |||||||
Restructuring, acquisition and integration-related and other costs | 2,800 | 456 | |||||
Acquisitions purchase accounting, including inventory step-up | 3,551 | — | |||||
Adjusted segment operating income | $ | 149,719 | 136,441 |
Reconciliation of Segment Operating Income to Adjusted Segment Operating Income | |||||||
(Amounts in thousands) | |||||||
Three Months Ended | |||||||
Flooring NA | September 30, 2017 | October 1, 2016 | |||||
Operating income | $ | 163,494 | 170,507 | ||||
Adjustments to segment operating income: | |||||||
Legal settlement and reserves | — | (90,000 | ) | ||||
Restructuring, acquisition and integration-related and other costs | 8,682 | 26,193 | |||||
Tradename impairment | — | 47,905 | |||||
Adjusted segment operating income | $ | 172,176 | 154,605 |
Reconciliation of Segment Operating Income to Adjusted Segment Operating Income | |||||||
(Amounts in thousands) | |||||||
Three Months Ended | |||||||
Flooring ROW | September 30, 2017 | October 1, 2016 | |||||
Operating income | $ | 83,042 | 81,757 | ||||
Adjustments to segment operating income: | |||||||
Restructuring, acquisition and integration-related and other costs | 1,620 | 3,596 | |||||
Adjusted segment operating income | $ | 84,662 | 85,353 |
Reconciliation of Earnings Including Noncontrolling Interests Before Income Taxes to Adjusted Earnings Including Noncontrolling Interests Before Income Taxes | |||||||
(Amounts in thousands) | |||||||
Three Months Ended | |||||||
September 30, 2017 | October 1, 2016 | ||||||
Earnings before income taxes | $ | 371,554 | 365,058 | ||||
Noncontrolling interests | (997 | ) | (949 | ) | |||
Adjustments to earnings including noncontrolling interests before income taxes: | |||||||
Restructuring, acquisition and integration-related & other costs | 13,853 | 30,572 | |||||
Acquisitions purchase accounting, including inventory step-up | 3,551 | — | |||||
Legal settlement and reserves | — | (90,000 | ) | ||||
Release of indemnification asset | — | 2,368 | |||||
Tradename impairment | — | 47,905 | |||||
Adjusted earnings including noncontrolling interests before income taxes | $ | 387,961 | 354,954 |
Reconciliation of Income Tax Expense to Adjusted Income Tax Expense | |||||||
(Amounts in thousands) | |||||||
Three Months Ended | |||||||
September 30, 2017 | October 1, 2016 | ||||||
Income tax expense | $ | 100,532 | 94,231 | ||||
Income taxes - reversal of uncertain tax position | — | 2,368 | |||||
Income tax effect of adjusting items | 6,545 | (2,856 | ) | ||||
Adjusted income tax expense | $ | 107,077 | 93,743 | ||||
Adjusted income tax rate | 27.6 | % | 26.4 | % |