Mohawk Reports Higher Earnings on Unilin Strength

Calhoun, GA, Aug. 5, 2010--Mohawk Industries reported second quarter net earnings of $68 million and earnings per share of $0.99, which included special charges and tax credits. Excluding the items, net earnings would have been $53 million and $0.77 per share.

A year ago, net earnings were $46 million and $0.67 per share. Excluding the 2009 unusual items, net earnings and would have been $54 million and $0.79 per share.

Net sales for the second quarter were $1.4 billion, which was flat year over year. The company reported an operating margin of 6.4%, its highest in two years.

For the first six months, net earnings were $89 million or $1.29 per share. Excluding the unusual items, net earnings would have been $77 million $1.12 per share. A year ago, Mohawk reported a net loss of $60 million and loss per share was $0.87. Excluding the 2009 year-to-date unusual items, net earnings would have been $64 million and $0.93 per share.

Net sales for the first six months of 2010 were $2.7 billion, representing a 5% increase from 2009. On a local exchange rate, constant days and excluding 2009 sales adjustments net sales decreased 2.5% during this period.

"Our earnings were better than anticipated due to higher sales in Unilin, improving product mix in Mohawk, price increases and cost reduction programs," said CEO Jeffrey S. Lorberbaum.

"Our second quarter sales were flat compared to the prior year as the residential business improved. The European business grew in most geographic and product categories with volumes increasing. Commercial markets are declining at a slower rate with expectations of a bottom this year. Residential remodeling markets should expand in the second half of the year driven by higher disposable income and low interest rates. New home construction remains low but above last year. The European economy is gaining momentum with positive industry reports, higher consumer confidence and an improved banking outlook. We have expanded our international presence with a minority interest in one of the top ten Chinese ceramic tile manufacturers and purchased a building in Russia for laminate manufacturing."

Mohawk segment net sales were down 3%. The company anticipates that its residential product introductions shipped earlier this year and should improve our volume in the second half of the year.

Dal-Tile segment net sales were down 3% as home construction and commercial activity remain slow.

The company said that a hurricane in Monterrey, Mexico flooded a ceramic tile production in the beginning of July, but the plant should be operational again in a month.

Unilin segment net sales increased 10% as reported or 16% in local currency on higher sales overseas.

Related Topics:Daltile, Mohawk Industries