-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AFejvSV8X7QETMJq9K7p+EMDyJKKf6kZlFtj6orHE9/seK27O1ftlEWVDD4Jrmcs 7kwOPPhsC/y/wg6UEvC9wQ== 0000931763-98-000201.txt : 19980206 0000931763-98-000201.hdr.sgml : 19980206 ACCESSION NUMBER: 0000931763-98-000201 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980215 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980205 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: MOHAWK INDUSTRIES INC CENTRAL INDEX KEY: 0000851968 STANDARD INDUSTRIAL CLASSIFICATION: CARPETS AND RUGS [2273] IRS NUMBER: 521604305 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-13697 FILM NUMBER: 98522708 BUSINESS ADDRESS: STREET 1: 160 S INDUSTRIAL BLVD STREET 2: PO BOX 12069 CITY: CALHOUN STATE: GA ZIP: 30701 BUSINESS PHONE: 7066297721 MAIL ADDRESS: STREET 1: P O BOX 12069 CITY: CALHOUN STATE: GA ZIP: 30703 8-K 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Act of 1934 Date of Report (Date of earliest event reported): February 5, 1998 MOHAWK INDUSTRIES, INC. ---------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 01-19826 52-1604305 ----------------- ------------------------ ------------------- (State or other (Commission File Number) (IRS Employer jurisdiction of Identification No.) incorporation) 160 South Industrial Blvd., Calhoun, Georgia 30701 ----------------------------------------------------------------------- (Address, including zip code, of principal executive offices) (706) 629-7721 -------------------------------------------------------------- (Registrant's telephone number, including area code) Item 5. Other Events ------------ On February 5, 1998, Mohawk Industries, Inc. ("Mohawk") issued a press release containing certain earnings information with respect to the fourth quarter and the fiscal year ended December 31, 1997. A copy of such press release is included as an exhibit to this report and incorporated herein by reference. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. ------------------------------------------------------------------- C. Exhibits 99.1 Press Release dated February 5, 1998 2 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Mohawk Industries, Inc. Date: February 5, 1998 By: /s/ Frank H. Boykin ------------------------- Frank H. Boykin Corporate Controller 3 INDEX TO EXHIBITS ----------------- Exhibit ------- 99.1 Press Release dated February 5, 1998 EX-99.1 2 PRESS RELEASE DATED 2/5/98 EXHIBIT 99.1 Mohawk Industries, Inc. Press Release NEWS RELEASE - ----------------------------------------------[LOGO OF MOHAWK APPEARS HERE] POST OFFICE BOX 12069 SOUTH INDUSTRIAL BLVD. CALHOUN, GA 30703 (706) 629-7721 FOR RELEASE: IMMEDIATELY CONTACT: JOHN D. SWIFT, CHIEF FINANCIAL OFFICER MOHAWK INDUSTRIES, INC. ANNOUNCES RECORD RESULTS FOR THE 1997 FOURTH QUARTER AND YEAR AND SECONDARY OFFERING OF STOCKHOLDER'S COMMON STOCK CALHOUN, GEORGIA, FEBRUARY 5, 1998 - MOHAWK INDUSTRIES, INC. (NYSE: MHK), TODAY ANNOUNCED RECORD RESULTS FOR THE QUARTER AND YEAR ENDED DECEMBER 31, 1997. NET EARNINGS FOR THE QUARTER WERE A RECORD $24,224,000 (75% ABOVE LAST YEAR) OR $0.46 DILUTED EARNINGS PER SHARE (EPS) BEFORE A $5,500,000 CHARGE FOR THE WRITE- DOWN OF ASSETS HELD FOR SALE (FAS NO. 121) AND A $2,600,000 CHARGE FOR COMPENSATION EXPENSE RELATED TO STOCK OPTION EXERCISES. AFTER THE NONRECURRING CHARGES, NET EARNINGS WERE $19,323,000 OR $0.37 DILUTED EARNINGS PER SHARE FOR THE FOURTH QUARTER OF 1997. THIS COMPARES TO NET EARNINGS BEFORE NONRECURRING CHARGES FOR THE FOURTH QUARTER OF 1996 OF $13,867,000 OR $0.27 DILUTED EARNINGS PER SHARE. THE FOURTH QUARTER 1996 RESULTS INCLUDED NONRECURRING CHARGES FOR FAS NO. 121 AND RESTRUCTURING COSTS FOR MILL CLOSINGS, ALL OF WHICH ARE DESCRIBED IN THE CHART BELOW. NET EARNINGS FOR THE FOURTH QUARTER OF 1996 AFTER NONRECURRING CHARGES WERE $12,517,000 OR $0.24 DILUTED EARNINGS PER SHARE. THIS IMPROVEMENT IN NET EARNINGS AND EPS, PRIMARILY RESULTS FROM HIGHER SALES, LOWER SELLING, GENERAL AND ADMINISTRATIVE EXPENSES, AND LOWER INTEREST EXPENSE. NET SALES FOR THE CURRENT QUARTER INCREASED 12% TO $516,118,000 COMPARED TO $461,505,000 FOR THE FOURTH QUARTER OF 1996. ALL MAJOR PRODUCT CATEGORIES ACHIEVED SALES INCREASES IN THE FOURTH QUARTER OF 1997 AS COMPARED TO THE FOURTH QUARTER OF 1996. THESE SALES INCREASES WERE ATTRIBUTABLE TO STRONG CUSTOMER ACCEPTANCE OF NEW PRODUCT INTRODUCTIONS, EXPANSION OF RESIDENTIAL WAREHOUSING OPERATIONS, AND FURTHER REFINEMENT OF THE SALES ORGANIZATION TO ACHIEVE BETTER REGIONAL CUSTOMER FOCUS, ALL OF WHICH THE COMPANY BELIEVES RESULTED IN AN OVERALL GAIN IN MARKET SHARE. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES WERE $74,068,000 OR 14.4% OF NET SALES IN THE FOURTH QUARTER OF 1997 AS COMPARED TO $74,217,000 OR 16.1% OF NET SALES IN THE FOURTH QUARTER OF 1996. THE IMPROVEMENT IN SELLING, GENERAL AND ADMINISTRATIVE EXPENSES IS PRIMARILY ATTRIBUTABLE TO LOWER ADMINISTRATIVE, BAD DEBT AND SAMPLE EXPENSES. INTEREST EXPENSE WAS LOWER IN 1997 AS A RESULT OF REDUCED LEVELS OF DEBT. NET EARNINGS, BEFORE NONRECURRING CHARGES, FOR THE YEAR 1997 OF $72,931,000, (42% ABOVE LAST YEAR) OR $1.39 DILUTED EARNINGS PER SHARE WERE THE HIGHEST IN THE COMPANY'S HISTORY. THIS COMPARES TO NET EARNINGS, BEFORE NONRECURRING CHARGES, OF $51,280,000 OR $0.99 DILUTED EARNINGS PER SHARE IN 1996. THE IMPROVEMENT IN NET EARNINGS AND EPS PRIMARILY RESULTS FROM HIGHER SALES, LOWER SELLING, GENERAL AND ADMINISTRATIVE EXPENSES, AND LOWER INTEREST EXPENSE. AFTER NONRECURRING CHARGES, WHICH ARE ALL MORE FULLY DESCRIBED IN THE CHART BELOW, NET EARNINGS FOR 1997 WERE $68,030,000 OR $1.30 DILUTED EARNINGS PER SHARE. FOR THE YEAR ENDED DECEMBER 31, 1996, THE COMPANY RECORDED NET EARNINGS OF $49,050,000, OR $0.95 DILUTED EARNINGS PER SHARE, AFTER THE NONRECURRING CHARGES. DURING THE FOURTH QUARTER OF 1997, THE COMPANY REVISED ITS ESTIMATE OF THE FAIR VALUE OF CERTAIN PROPERTY, PLANT AND EQUIPMENT HELD FOR SALE. THIS REVISION RESULTED IN A $5,500,000 PRE-TAX WRITE-DOWN TO THE CARRYING VALUE OF THOSE ASSETS. THE REVISION WAS BASED UPON CURRENT APPRAISALS AND OTHER MARKET INFORMATION. IN ADDITION, A $2,600,000 PRE-TAX CHARGE WAS RECORDED FOR ADDITIONAL INCOME TAX REIMBURSEMENTS TO BE MADE TO CERTAIN EXECUTIVES FOR THE EXERCISE OF STOCK OPTIONS. THE INCOME TAX REIMBURSEMENTS WERE RECORDED IN ACCORDANCE WITH THE STOCK OPTION AGREEMENTS ENTERED INTO IN 1988 AND 1989 IN CONNECTION WITH THE COMPANY'S 1988 LEVERAGED BUYOUT. NET SALES FOR THE YEAR TOTALED $1,901,352,000, REPRESENTING AN INCREASE OF APPROXIMATELY 7% OVER THE $1,779,389,000 RECORDED IN THE PRIOR YEAR. ALL MAJOR PRODUCT CATEGORIES ACHIEVED SALES INCREASES IN 1997 AS COMPARED TO 1996. THESE SALES INCREASES WERE ATTRIBUTABLE TO STRONG CUSTOMER ACCEPTANCE OF NEW PRODUCT INTRODUCTIONS, EXPANSION OF RESIDENTIAL WAREHOUSING OPERATIONS, FURTHER REFINEMENT OF THE SALES ORGANIZATION TO ACHIEVE BETTER REGIONAL CUSTOMER FOCUS, AND COMPETITIVE CHANGES IN THE DISTRIBUTION SEGMENT OF THE INDUSTRY, ALL OF WHICH THE COMPANY BELIEVES RESULTED IN AN OVERALL GAIN IN MARKET SHARE. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES WERE $286,996,000 OR 15.1% OF NET SALES IN 1997 AS COMPARED TO $284,194,000 OR 16.0% OF NET SALES IN 1996. THE IMPROVEMENT IN THE SELLING, GENERAL AND ADMINISTRATIVE EXPENSE AS A PERCENTAGE OF NET SALES IS PRIMARILY ATTRIBUTABLE TO LOWER ADMINISTRATIVE, BAD DEBT AND SAMPLE EXPENSES. INTEREST EXPENSE WAS LOWER IN 1997 AS A RESULT OF REDUCED LEVELS OF DEBT. THE FOLLOWING CHART DESCRIBES THE EFFECT OF THE NONRECURRING CHARGES ON NET EARNINGS AND EPS (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA):
QUARTERS ENDED YEARS ENDED DECEMBER 31, 1997 DECEMBER 31, 1996 DECEMBER 31, 1997 DECEMBER 31, 1996 ---------------------- ------------------- ------------------ ------------------- EARNINGS EPS EARNINGS EPS EARNINGS EPS EARNINGS EPS ---------- ------- ---------- ------ ---------- ----- ---------- ------ NET EARNINGS, AS REPORTED $19,323 $0.37 $12,517 $0.24 $68,030 $1.30 $49,050 $0.95 NONRECURRING CHARGES (NET OF TAXES): FAS NO. 121 CHARGES $ 3,328 $0.06 $ 958 $0.02 $ 3,328 $0.06 $ 1,815 $0.03 COMPENSATION EXPENSE $ 1,573 $0.03 - - $ 1,573 $0.03 - - RESTRUCTURING CHARGES - - $ 392 $0.01 - - $ 415 $0.01 ------- ----- ------- ----- ------- ----- ------- ----- NET EARNINGS BEFORE NONRECURRING CHARGES $24,224 $0.46 $13,867 $0.27 $72,931 $1.39 $51,280 $0.99 ======= ===== ======= ===== ======= ===== ======= ===== - -----
IN COMMENTING ON THE FOURTH QUARTER PERFORMANCE, DAVID L. KOLB, CHAIRMAN AND CEO, STATED, "WE ARE VERY PLEASED WITH THE FOURTH QUARTER RESULTS WHICH INCLUDED A 12% INCREASE IN SALES AS COMPARED TO AN INDUSTRY INCREASE OF APPROXIMATELY 4% OVER THE FOURTH QUARTER OF 1996. THE RESIDENTIAL BUSINESS REFLECTED STRONG SALES GROWTH FOR BOTH THE QUARTER AND THE YEAR WHEN COMPARED TO 1996 RESULTING IN INCREASED MARKET SHARE FOR THAT BUSINESS UNIT. OUR COMMERCIAL AND RUG BUSINESSES, THOUGH NOT AS STRONG AS THE RESIDENTIAL BUSINESS, DID SHOW IMPROVEMENT IN BOTH SALES AND MARGINS OVER THE FOURTH QUARTER AND THE YEAR 1996. WE ARE CONTINUING TO SEE IMPROVEMENTS IN OUR OPERATIONS FROM THE RESTRUCTURING EFFORTS THAT BEGAN ALMOST TWO YEARS AGO. THE CARPET AND RUG INSTITUTE KICKED OFF ITS INDUSTRY-WIDE ADVERTISING CAMPAIGN IN THE FOURTH QUARTER OF 1997 AND WE HAVE BEEN VERY PLEASED WITH THE RESULTS TO DATE OF THAT CAMPAIGN." ON FEBRUARY 5, 1998, THE COMPANY FILED A REGISTRATION STATEMENT WITH THE SECURITIES AND EXCHANGE COMMISSION COVERING A PROPOSED OFFERING OF 4,100,000 SHARES OF ITS COMMON STOCK WHICH ARE PROPOSED TO BE OFFERED BY A CERTAIN NONMANAGEMENT SELLING STOCKHOLDER TO MEET DIVERSIFICATION AND ESTATE PLANNING OBJECTIVES. IN ADDITION, THE SELLING STOCKHOLDER WILL GRANT TO THE UNDERWRITERS AN OPTION TO PURCHASE UP TO 400,000 ADDITIONAL SHARES SOLELY TO COVER OVER ALLOTMENTS IN THE OFFERING, IF ANY. CREDIT SUISSE FIRST BOSTON AND INVEMED ASSOCIATES, INC. WILL ACT AS UNDERWRITERS OF THE OFFERING. A REGISTRATION STATEMENT RELATED TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION BUT HAS NOT YET BECOME EFFECTIVE. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PRESS RELEASE SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. CERTAIN OF THE STATEMENTS IN THE PRECEDING PARAGRAPHS REGARDING IMPROVEMENT IN OPERATIONS FROM RESTRUCTURING EFFORTS AND THE INDUSTRY-WIDE ADVERTISING CAMPAIGN CONSTITUTE "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933, AS AMENDED, AND ARE SUBJECT TO THE SAFE HARBOR PROVISIONS THEREOF. THOSE STATEMENTS ARE BASED ON ASSUMPTIONS REGARDING THE OPERATION AND EFFECT OF THE RESTRUCTURING EFFORTS AND ADVERTISING CAMPAIGN. THESE OR OTHER ASSUMPTIONS COULD PROVE INACCURATE AND, THEREFORE, THERE CAN BE NO ASSURANCE THAT THE "FORWARD-LOOKING STATEMENTS" WILL PROVE TO BE ACCURATE. MOHAWK IS A LEADING PRODUCER OF WOVEN AND TUFTED BROADLOOM CARPET AND RUGS FOR RESIDENTIAL AND COMMERCIAL APPLICATIONS. THE COMPANY DESIGNS, MANUFACTURES AND MARKETS CARPET IN A BROAD RANGE OF COLORS, TEXTURES AND PATTERNS AND IS WIDELY RECOGNIZED THROUGH ITS PREMIER BRAND NAMES, SOME OF WHICH INCLUDE "ALADDIN," "ALEXANDER SMITH," "BIGELOW," "GALAXY," "HARBINGER," "HELIOS," "HORIZON," "KARASTAN," "MOHAWK" AND "MOHAWK COMMERCIAL." MOHAWK OFFERS A BROAD LINE OF WASHABLE ACCENT AND BATH RUGS THROUGH ALADDIN AND AREA RUGS THROUGH KARASTAN AND AMERICAN RUG CRAFTSMEN. THE COMPANY MARKETS ITS PRODUCTS PRIMARILY THROUGH RETAILERS, COMMERCIAL DEALERS AND COMMERCIAL END USERS. ##### MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF EARNINGS DATA Three Months Ended Twelve Months Ended (Amounts in thousands, except per share data) Dec 31, 1997 Dec 31, 1996(2) Dec 31, 1997(2) Dec 31, 1996(2) ------------ ------------ ------------ ------------ Net sales $516,118 461,505 1,901,352 1,779,389 Cost of sales 396,698 353,432 1,464,697 1,372,022 -------- ------- --------- --------- Gross profit 119,420 108,073 436,655 407,367 Selling, general and administrative expenses 74,068 74,217 286,996 284,194 Restructuring costs - 700 - 700 Carrying value reduction of assets held for sale 5,500 1,710 5,500 3,060 Compensation expense for stock option exercises 2,600 - 2,600 - -------- ------- --------- --------- Operating income 37,252 31,446 141,559 119,413 Interest expense 4,914 6,360 26,457 31,486 Other expense, net 400 2,738 2,656 5,202 -------- ------- --------- --------- Earnings before income taxes 31,938 22,348 112,446 82,725 Income taxes 12,615 9,831 44,416 33,675 -------- ------- --------- --------- Net earnings $ 19,323 12,517 68,030 49,050 -------- ------- --------- --------- Basic earnings per share (1) $ 0.37 0.24 1.31 0.96 -------- ------- --------- --------- Weighted-average common shares outstanding (1) 52,129 51,707 51,912 51,260 -------- ------- --------- --------- Diluted earnings per share (1) $ 0.37 0.24 1.30 0.95 -------- ------- --------- --------- Weighted-average common and dilutive potential common shares outstanding (1) 52,668 52,241 52,403 51,849 ======== ======= ========= ========= CONSOLIDATED BALANCE SHEET DATA (Amounts in thousands) Dec 31, 1997 Dec 31, 1996 (2) ------------ ---------------- ASSETS Current assets: Receivables $ 238,579 215,594 Inventories 291,306 302,767 Prepaid expenses 15,192 18,298 Deferred income taxes 28,192 18,186 --------- --------- Total current assets 573,269 554,845 Property, plant and equipment, net 319,818 324,698 Other assets 67,868 74,806 --------- --------- $ 960,955 954,349 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of long-term debt and note payable $ 35,959 41,832 Accounts payable and accrued expenses 227,161 201,315 --------- --------- Total current liabilities 263,120 243,147 Long-term debt, less current portion 257,238 345,748 Deferred income taxes and other long-term liabilities 34,682 32,255 --------- --------- Total liabilities 555,040 621,150 --------- --------- Total stockholders' equity 405,915 333,199 --------- --------- $ 960,955 954,349 ========= =========
(1) All per share and share amounts reflect a 3-for-2 stock split. (2) Certain prior period financial statement balances have been reclassified to conform with the current period's presentation. -----END PRIVACY-ENHANCED MESSAGE-----