Mohawk Reports Third Quarter Earnings of $34M

Calhoun, GA, Oct. 29, 2009--Mohawk Industries reported third quarter net earnings of $34 million and earnings per share of $0.50, which included a restructuring charge of approximately $16 million, primarily related to distribution and manufacturing infrastructure.

Excluding the restructuring charge, net earnings would be $44 million.

In the third quarter of 2008, the net loss was $1.48 billion and loss per share was $21.70. Excluding the 2008 third quarter charges, net earnings would have been $84 million.

Net sales for the 2009 third quarter were $1.383 billion, a decrease of 22% from 2008.

For the nine months of 2009, net loss was $25 million or a net loss per share of $0.37. Excluding year to date charges, net earnings would be $108 million and $1.57 per share.

"Our third quarter earnings were slightly better than our guidance due to the many changes we have made to manage through this difficult environment," said CEO Jeff Lorberbaum.

Our gross margin of 27%, an improvement of almost 200 basis points over last year benefited from lower raw material and freight costs, personnel reductions, cost containment measures and plant consolidations. Investments in new products, research and development and capital expenditures are being made to improve sales, efficiencies, quality and service. Our strategy continues to be adjusted as the economic environment requires."

Mohawk segment sales were down 21% for the third quarter, in line with the industry. The company said much of its efforts to reduce costs and improve processes have been offset by low industry volumes and unabsorbed overhead.

Mohawk said that consumers are purchasing more value-oriented products and selling prices on commoditized products have compressed. Residential volume remains weak with commercial still in decline.

Dal-Tile sales for the third quarter were down 23% due to the decline in new housing sales and commercial business. Mohawk said that Dal-Tile is taking share from imports, which make up about half of the industry volume.

Unilin sales declined 21%. The firm said its laminate business has been influenced by customers trading down to lower value alternatives. To improve its laminate sales, it is increasing participation in the DIY channels.

Business conditions remain weak, Mohawk said, although residential business appears to have stabilized. However, commercial business will continue to be difficult next year. Carpet material costs will reduce margins it can raise prices.

Related Topics:Daltile, Mohawk Industries