-----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, Fe82IwFNRkZxqjUWwxax+/xNh4DKoJyJujyQ8GjcIGV0K0Y5o1Om7VLHxFDSmM4N Hnlf7Q8fiTokUpDwDdSRaw== 0000931763-98-002717.txt : 19981026 0000931763-98-002717.hdr.sgml : 19981026 ACCESSION NUMBER: 0000931763-98-002717 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981015 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19981023 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: 98729716 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): October 15, 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 October 15, 1998, Mohawk Industries, Inc. ("MOHAWK") issued a press release containing certain earnings information with respect to the third quarter and first nine months ended September 26, 1998. 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 October 15, 1998 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: October 23, 1998 By: /s/ FRANK H. BOYKIN ------------------------- Frank H. Boykin Corporate Controller INDEX TO EXHIBITS ----------------- Exhibit ------- 99.1 Press Release dated October 15, 1998 EX-99.1 2 PRESS RELEASE NEWS RELEASE ____________ 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 1998 THIRD QUARTER AND FIRST NINE MONTHS RESULTS Calhoun, Georgia, October 15, 1998 - Mohawk Industries, Inc. (NYSE:MHK) today announced the highest quarterly earnings per share attained by the Company. Net earnings for the quarter ended September 26, 1998 increased 56% to $32,467,000 or $0.61 diluted earnings per share, compared to net earnings of $20,853,000 or $0.40 diluted earnings per share, for the third quarter of 1997. This improvement in net earnings was the result of higher sales, improved gross profit margins, lower interest expense, and lower selling, general and administrative expense as a percentage of net sales. Net sales for the quarter increased 15% to $576,328,000 compared to $500,818,000 for the third quarter of 1997. Sales increased over 11% during the quarter excluding the impact of the acquisitions. All areas of the Company provided strong growth in both sales and earnings including our third quarter acquisitions of Newmark & James and American Weavers. Net earnings for the first nine months of 1998 increased 60% over 1997 and were the highest first nine months' earnings in the Company's history with net earnings of $77,829,000 or $1.47 diluted earnings per share. This compares to the first nine months of 1997 net earnings of $48,707,000 or $0.93 diluted earnings per share. This improvement in net earnings was attributable to higher sales, improved gross profit margins, lower interest expense and lower selling, general and administrative expense as a percentage of net sales. Net sales for the first nine months of 1998 were $1,582,494,000 representing a 14% increase from the first nine months of 1997 sales of $1,385,234,000. In commenting on the third quarter performance, David L. Kolb, Chairman and CEO, stated, "We have recorded higher earnings, on a year-to-year comparison, for eleven consecutive quarters with our most current period the strongest in our history. New 1998 product introductions in residential and commercial broadloam carpet and area rugs have received wide consumer acceptance thereby adding significantly to 1998 sales and profit growth. This strong demand for new products has resulted in the acceleration of the expansion of manufacturing capacities during the third quarter to better meet customer orders. Gross profit for the quarter improved from 23.3% of net sales in the prior year quarter to 25.0% in the current quarter as the result of manufacturing efficiencies and favorable material costs. Positive cash flow from operations has continued to reduce our requirement for debt financing, resulting in lower interest expense for both the current quarter and nine-month period and improving our debt-to- total capitalization ratio to approximately 38% from 46% one year ago. We continue to support the Carpet and Rug Institute's industry-wide advertising campaign as well as expand our focused company advertising campaigns. We are optimistic about the result of these advertising efforts. On June 30, 1998, we completed the acquisition of Newmark & James, with annual sales in excess of $35,000,000, which fills a niche in the high-end washable bath rug market in which we previously had a limited presence. On August 10, 1998, we completed the acquisition of American Weavers, with annual sales in excess of $40,000,000. American Weavers provides an entry into new related product lines that are carried by some of Mohawk's current customers and some new customers. These product lines include tufted, woven and knitted decorative throws, placemats, table runners and kitchen chair pads. In addition, American Weavers has a strong position in tufted accent, scatter and area rugs that will effectively complement our current lines. Both acquisitions were immediately accretive to Mohawk's earnings and provided a positive contribution to sales and earnings in the third quarter of 1998. We have continued with our successful strategy since our stock first was publicly traded in 1992. We are committed to strengthening our alignment with our independent retailers to ensure the mutual success of both Mohawk and our customers. Our acquisition strategy continues to lead the industry consolidation efforts and add value for our shareholders by acquiring companies which add market niches that complement existing product lines or that provide opportunities for synergies and cost savings through Mohawk's low cost structure." Certain of the statements in the immediately preceding paragraphs regarding the effects of the Newmark & James and American Weavers acquisitions and the industry-wide advertising campaigns may constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1993, as amended, and are subject to the safe harbor provisions thereof. Those statements are based on assumptions regarding the Company's ability to successfully integrate the Newmark & James and American Weavers acquisitions and the effectiveness of the advertising campaign. These or other assumptions identified from time to time in the Company's SEC reports and public announcements 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 Newmark & James and area rugs through Karastan, American Rug Craftsmen and American Weavers. Mohawk also offers a complete laminate product line under the INSIGNIA brand name. The Company markets its products primarily through retailers and commercial dealers. MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES
Consolidated Statement of Earnings Data Three Months Ended Nine Months Ended (Amounts in thousands, except per share data) Sept. 26, 1998 Sept. 27, 1997 Sept. 26, 1998 Sept. 27, 1997 ------------------------------- ------------------------------- Net sales $ 576,328 500,818 1,582,494 1,385,234 Cost of sales 432,060 384,338 1,191,644 1,067,999 - ---------------------------------------------------------------------------------------------------------------- Gross profit 144,268 116,480 390,850 317,235 Selling, general and administrative expenses 84,688 74,441 244,116 212,928 - ---------------------------------------------------------------------------------------------------------------- Operating income 59,580 42,039 146,734 104,307 Interest expense 5,022 6,689 16,338 21,543 Other expense, net 893 871 1,752 2,256 - ---------------------------------------------------------------------------------------------------------------- Earnings before income taxes 53,665 34,479 128,644 80,508 Income taxes 21,198 13,626 50,815 31,801 - ---------------------------------------------------------------------------------------------------------------- Net earnings $ 32,467 20,853 77,829 48,707 - ---------------------------------------------------------------------------------------------------------------- Basic earnings per share $ 0.62 0.40 1.49 0.94 - ---------------------------------------------------------------------------------------------------------------- Weighted-average common shares outstanding 52,385 51,935 52,310 51,840 - ---------------------------------------------------------------------------------------------------------------- Diluted earnings per share $ 0.61 0.40 1.47 0.93 - ---------------------------------------------------------------------------------------------------------------- Weighted-average common and dilutive potential common shares outstanding 53,119 52,454 53,057 52,316 - ---------------------------------------------------------------------------------------------------------------- Consolidated Balance Sheet Data (Amounts in thousands) Sept. 26, 1998 Sept. 27, 1997 -------------- -------------- ASSETS Current assets: Receivables $ 307,069 253,806 Inventories 356,266 316,344 Prepaid expenses 4,821 7,723 Deferred income taxes 27,670 18,186 - ---------------------------------------------------------------------------------------------------------- Total current assets 695,826 596,059 Property, plant and equipment, net 340,892 322,431 Other assets 90,401 74,274 - ---------------------------------------------------------------------------------------------------------- $ 1,127,119 992,764 - ---------------------------------------------------------------------------------------------------------- LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $ 32,209 21,772 Accounts payable and accrued expenses 305,521 255,220 - ---------------------------------------------------------------------------------------------------------- Total current liabilities 337,730 276,992 Long-term debt, less current portion 268,365 302,916 Deferred income taxes and other long-term liabilities 33,754 27,910 - ---------------------------------------------------------------------------------------------------------- Total liabilities 639,849 607,818 - ---------------------------------------------------------------------------------------------------------- Total stockholders' equity 487,270 384,946 - ---------------------------------------------------------------------------------------------------------- $ 1,127,119 992,764 - ---------------------------------------------------------------------------------------------------------- Dates for Future Press Releases and Conference Calls: Press Release Conference Call 4th Qtr. 1998 February 4 February 5 11:00 a.m. (800-603-9255) 1st Qtr. 1999 April 22 April 23 11:00 a.m. " 2nd Qtr. 1999 July 22 July 23 11:00 a.m. " 3rd Qtr. 1999 October 21 October 22 11:00 a.m. "
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