Mohawk Has Record Year End Earnings
Calhoun, GA, Feb. 7--Mohawk Industries had fourth quarter net earnings of $84.2 million (42% above last year) or $1.25 earnings per share (13% above last year), the highest quarterly earnings and EPS ever recorded by the company. This compares to $59.2 million in net earnings or EPS of $1.11 for the same period last year. This improvement was the result of the Dal-Tile merger, internal growth of Mohawk products, manufacturing cost improvements and efficiencies in selling, general and administrative costs. Net sales for the quarter increased 34% to $1.2 billion compared to $895.8 million for the fourth quarter of last year. The sales increase was attributable to the Dal-Tile merger, one additional day in the current quarter and internal growth of Mohawk products. Total net sales for the fourth quarter increased 5%, including Dal-Tile on a proforma basis. The Mohawk segment net sales of $920.0 million grew 2% excluding the one additional day, primarily from hard surface products. The Dal-Tile segment net sales of $283.5 million grew 9% (excluding the one additional day) on a proforma basis primarily from growth in residential products.
Net earnings for the year were $284.5 million (51% above last year) and EPS was $4.39 (24% above last year), the highest earnings and EPS ever recorded by Mohawk. This compares to $188.6 million in net earnings for the previous year or EPS of $3.55. This improvement was attributable to the Dal- Tile merger, internal growth of Mohawk products, manufacturing cost improvements and efficiencies in selling, general and administrative costs. Net sales for 2002 were $4.5 billion representing a 31% increase over 2001 net sales of $3.4 billion. The Mohawk segment net sales of $3.6 billion grew 5% compared to last year. The Dal-Tile segment proforma net sales of $1.1 billion grew 9% compared to 2001 sales ($1.0 billion). The total company net sales for the year increased 6%, including Dal-Tile on a proforma basis.
In commenting on the fourth quarter performance, Jeffrey S. Lorberbaum, president and CEO, stated, "I am proud to report another record quarter and year for our company. In light of the sluggish economy, rising oil prices and other pressures on our business, these results are extraordinary and point to the commitment our company has to maximizing shareholder value. We are focused on responding quickly to the current economic environment in order to maintain our high level of performance. Dal-Tile, which was acquired on March 20, 2002, was accretive to our EPS by approximately $0.12 for the year. Dal-Tile continues to record strong performances each quarter, validating our acquisition strategy to position Mohawk as a leader in all floorcovering products. We now have approximately 30% of our total sales in hard surface products, and we plan to continue to increase our market share of ceramic tile, wood, laminate and vinyl floorcovering products. The Mohawk segment sales growth for the fourth quarter reflected the slowing sales for the carpet and rug industry. The Dal-Tile segment continues to expand its market share as we broaden our customer base and increase our product offering. Our consolidated operating margin was at a record level this quarter.
"The higher operating income in the Mohawk segment is due to the impact of on-going efforts to reduce costs with the biggest impacts in favorable manufacturing variances as well as reductions in selling, general and administrative expenses. These lower costs were a combination of one-time and reoccurring reductions including maintenance, utility, sample and bad debt expenses. Our focus on better working capital management and strong cash flow is reflected in the continued reduction of our debt. We reduced our total debt by approximately $125 million in the fourth quarter and by approximately $330 million since the end of the first quarter (when Dal-Tile was acquired) resulting in a debt to capitalization ratio of 29% at the end of 2002."
Related Topics:Mohawk Industries, Daltile