EX-99.1 2 dex991.txt PRESS RELEASE Exhibit 99.1 For Release: Immediately Contact: John D. Swift, Chief Financial Officer MOHAWK INDUSTRIES, INC. ANNOUNCES RECORD EARNINGS PER SHARE FOR SECOND QUARTER 2001 Calhoun, Georgia, July 16, 2001 - Mohawk Industries, Inc. (NYSE:MHK) today announced its highest quarterly earnings per share attained by the Company since its stock first publicly traded in 1992. Diluted earnings per share (EPS) in the second quarter of 2001 were a record $0.88 per share or $46,466,000 in net earnings compared to $0.87 EPS in the second quarter of 2000 or $47,203,000 in net earnings. This improvement in EPS was the result of a higher gross profit as a percent of net sales and the stock repurchase program. Net sales for the quarter decreased 3% to $828,348,000 compared to $852,808,000 for the second quarter of 2000. The sales decrease is due to continued softness in the industry and ongoing general difficult economic conditions mostly offset by growth in the hard surface products. EPS for the first half of 2001 was $1.39 or $73,672,000 in net earnings compared to $1.47 EPS in the first half of 2000 or $81,200,000 in net earnings. Net sales for the first half of 2001 were $1,572,031,000 representing a 3% decrease from first half 2000 net sales of $1,617,891,000. In commenting on the second quarter performance, Jeffrey S. Lorberbaum, President and CEO, stated, "We are pleased with our improved gross profit and EPS this quarter. Our improvement in the gross profit percentage results from increased manufacturing efficiencies, cost containment and improvements in manufacturing utilization. Although sales remain soft because of slow general economic conditions, we are encouraged by the continuing expansion of our marketing programs and our growth in hard surface products. We continue to invest aggressively through the addition of hard surface flooring sales force and samples as well as the positioning of increased inventory to respond to our hard surface customer needs. We were also honored to receive the 2001 Dealers' Choice Award for carpet as sponsored by Floorcovering Weekly as part of SURFACES 2001. We are continuing with the stock repurchase program previously authorized by our Board of Directors. During the second quarter we purchased 93,800 shares of our stock, and we have purchased 8,993,000 shares since the inception of the program in September 1999. Our debt to total capitalization ratio continued to improve to 40.3% compared to 47.0% one year ago, even after considering our acquisition of Crown Crafts operations, capital expenditures, stock repurchases and hard surface investments. Our strong financial structure places us in good position to respond to future business opportunities. We will closely control our costs, working capital and capital expenditures throughout this current economic slowdown. As we look forward to the second half of the year, the economy continues to be a cause for concern. There has not been a consistent pattern of positive economic news to support a reversal in the soft economy. We will continue to closely review all alternatives for improving shareholder value during this time. Based on economic forecasts and our internal information, we believe EPS for the third and fourth quarters of 2001 will be in line with last year before extraordinary charges." Certain of the statements in the immediately preceding paragraphs, particularly anticipating future financial performance, business prospects, growth and operating strategies, proposed acquisitions, new products and similar matters, and those preceded by, followed by or that otherwise include the words "believes," "expects," "anticipates," "intends," "estimates," or similar expressions constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended. For those statements, Mohawk claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Those statements are based on assumptions regarding the Company's ability to continue to maintain its sales growth, gross margins, to control costs and improve its sales growth. These or other assumptions could prove inaccurate and therefore, there can be no assurance that the "forward-looking statements" will prove to be accurate. Forward-looking statements involve a number of risks and uncertainties. The following important factors affect the future results of Mohawk and could cause those results to differ materially from those expressed in the forward-looking statements: materially adverse changes in economic conditions generally in the carpet, rug and floorcovering markets served by Mohawk; competition from other carpet, rug and floorcovering manufacturers, raw material prices, timing and level of capital expenditures, the successful integration of acquisitions including the challenges inherent in diverting Mohawk's management attention and resources from other strategic matters and from operational matters for an extended period of time, the successful introduction of new products, including hard surface products, the successful rationalization of existing operations, and other risks identified from time to time in the Company's SEC reports and public announcements. 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 "Mohawk," "Aladdin," "Bigelow," "Custom Weave," "Durkan," "Galaxy," "Harbinger," "Helios," "Horizon," "Image," "Karastan," "Mohawk Commercial," "World," and "Wunda Weve." Mohawk offers a broad line of area and washable rugs branded by Karastan, Aladdin, Newmark & James and American Rug Craftsmen and decorative throw blankets, placemats, pillows and chairpads branded by American Weavers. Mohawk also offers a complete laminate product line and distributes carpet padding and ceramic tile. The Company markets its products primarily through retailers and dealers. ##### There will be a conference call Tuesday, July 17, 2001 ------------------------------------------------------ at 11:00 AM Eastern Time ------------------------ The telephone number to call is 1-800-603-9255. ---------------------------------------------- MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES
Consolidated Statement of Earnings Data Three Months Ended Six Months Ended ---------------------------- ------------------------------------ (Amounts in thousands, except per share data) June 30, 2001 July 1, 2000 June 30, 2001 July 1, 2000 ------------- ------------ ------------- ------------ Net sales $ 828,348 852,808 1,572,031 1,617,891 Cost of sales 611,628 636,926 1,177,286 1,211,446 ---------------------------------------------------------------------------------- ------------------------------------------ Gross profit 216,720 215,882 394,745 406,445 Selling, general and administrative expenses 133,159 126,971 257,579 251,828 ---------------------------------------------------------------------------------- ------------------------------------------ Operating income 83,561 88,911 137,166 154,617 Interest expense 8,232 9,674 17,184 18,414 Other expense, net 1,574 1,215 3,043 1,988 ---------------------------------------------------------------------------------- ------------------------------------------ Earnings before income taxes 73,755 78,022 116,939 134,215 Income taxes 27,289 30,819 43,267 53,015 ---------------------------------------------------------------------------------- ------------------------------------------ Net earnings $ 46,466 47,203 73,672 81,200 ================================================================================== ========================================== Basic earnings per share $ 0.89 0.88 1.41 1.48 ================================================================================== ========================================== Weighted-average common shares outstanding 52,266 53,836 52,314 54,723 ================================================================================== ========================================== Diluted earnings per share $ 0.88 0.87 1.39 1.47 ================================================================================== ========================================== Weighted-average common and dilutive potential common shares outstanding 52,882 54,336 52,926 55,217 ================================================================================== ========================================== Other Financial Information (Amounts in thousands) Depreciation & amortization $ 21,076 20,944 42,019 41,819 ================================================================================== ========================================== Capital expenditures $ 14,950 16,783 26,647 34,842 ================================================================================== ========================================== Consolidated Balance Sheet Data (Amounts in thousands) June 30, 2001 July 1, 2000 ------------- ------------ ASSETS Current assets: Receivables $ 392,552 396,223 Inventories 619,177 576,653 Prepaid expenses 17,873 12,820 Deferred income taxes 66,474 76,628 ------------------------------------------------------------------------------------------------------------------------------- Total current assets 1,096,076 1,062,324 Property, plant and equipment, net 635,558 622,902 Other assets 116,788 118,331 ------------------------------------------------------------------------------------------------------------------------------- $ 1,848,422 1,803,557 =============================================================================================================================== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $ 236,348 33,893 Accounts payable and accrued expenses 392,560 444,372 ------------------------------------------------------------------------------------------------------------------------------- Total current liabilities 628,908 478,265 Long-term debt, less current portion 319,456 579,603 Deferred income taxes and other long-term liabilities 76,589 54,175 ------------------------------------------------------------------------------------------------------------------------------- Total liabilities 1,024,953 1,112,043 ------------------------------------------------------------------------------------------------------------------------------- Total stockholders' equity 823,469 691,514 ------------------------------------------------------------------------------------------------------------------------------- $ 1,848,422 1,803,557 ===============================================================================================================================
-------------------------------------------------------------------------------- Dates for Future Releases and Conference Calls: Press Release Conference Call 2nd Qtr. 2001 July 16 July 17 11:00 a.m. (800-603-9255) 3rd Qtr. 2001 October 15 October 16 11:00 a.m. " 4th Qtr. 2001 February 7 February 8 11:00 a.m. " 1st Qtr. 2002 April 15 April 16 11:00 a.m. " Conference call replay is (800) 642-1687 and is available for five days after the conference call. Enter conference ID number 1378718.