EXHIBIT 99.1
For Release: Immediately
Contact: John D. Swift, Chief Financial Officer
MOHAWK INDUSTRIES, INC. ANNOUNCES RECORD
SECOND QUARTER AND FIRST SIX MONTHS 2000 RESULTS
Calhoun, Georgia, July 20, 2000 - 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 2000 were a record $0.87 per share (21% above last year) or
$47,203,000 in net earnings compared to $0.72 EPS in the second quarter of 1999
or $44,093,000 in net earnings. This improvement in net earnings was the result
of higher sales and lower selling, general and administrative expenses as a
percentage of sales. Net sales for the quarter increased 8% to $852,808,000
compared to $790,617,000 for the second quarter of 1999. The sales increase was
attributable to internal growth and was realized across all product lines
including broadloom carpet, rugs, hard surfaces and other textile products.
Gross profit as a percentage of net sales was flat in 2000 when compared to 1999
with oil-related cost increases being offset by selling price increases and the
previously announced change in depreciable lives of fixed assets. The reduction
in selling, general and administrative expenses as a percentage of sales results
from cost control.
EPS for the first half of 2000 was a record $1.47 (26% above last year) or
$81,200,000 in net earnings compared to $1.17 EPS in the first half of 1999 or
$71,985,000 in net earnings. This improvement in net earnings was attributable
to increased sales and lower selling, general and administrative expenses as a
percentage of net sales. Net sales for the first half of 2000 were
$1,617,891,000 representing an 8% increase from first half of 1999 net sales of
$1,497,784,000. This increase was primarily due to internal growth.
In commenting on the second quarter performance, David L. Kolb, Chairman and
CEO, stated, "We are proud of our sales increase and believe that we outpaced
the industry growth for all product categories thereby gaining market share. We
are especially encouraged that we have been able to maintain our gross profit
margin as a percentage of net sales in the face of significant oil-related cost
increases. We have been able to accomplish this through the hard work and
commitment of all our employees. During the second quarter, we repurchased
approximately 1,514,000 shares and have maintained our investment-grade debt
rating through good management of working capital and capital expenditures. We
recently showed our new Ralph Lauren line of broadloom carpet and it was
received very well. We will be introducing the new Ralph Lauren line during the
third quarter of 2000."
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 and gross margins and to control costs. 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, 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.
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There will be a conference call Friday, July 21, 2000
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at 11:00 AM Eastern Time
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The telephone number to call is 1-800-603-9255.
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MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES
Consolidated Statement of Earnings Data Three Months Ended Six Months Ended
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(Amounts in thousands, except per share data) July 1, 2000 July 3, 1999 July 1, 2000 July 3, 1999
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Net sales $ 852,808 790,617 1,617,891 1,497,784
Cost of sales 636,926 589,706 1,211,446 1,118,544
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Gross profit 215,882 200,911 406,445 379,240
Selling, general and administrative expenses 126,971 119,997 251,828 242,662
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Operating income 88,911 80,914 154,617 136,578
Interest expense 9,674 7,753 18,414 15,607
Other expense, net 1,215 280 1,988 1,988
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Earnings before income taxes 78,022 72,881 134,215 118,983
Income taxes 30,819 28,788 53,015 46,998
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Net earnings $ 47,203 44,093 81,200 71,985
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Basic earnings per share $ 0.88 0.73 1.48 1.19
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Weighted-average common shares outstanding 53,836 60,593 54,723 60,579
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Diluted earnings per share $ 0.87 0.72 1.47 1.17
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Weighted-average common and dilutive potential common
shares outstanding 54,336 61,257 55,217 61,271
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Consolidated Balance Sheet Data
(Amounts in thousands)
July 1, 2000 July 3, 1999
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ASSETS
Current assets:
Receivables $ 396,223 372,495
Inventories 576,653 528,555
Prepaid expenses 12,820 10,677
Deferred income taxes 76,628 52,571
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Total current assets 1,062,324 964,298
Property, plant and equipment, net 622,902 605,567
Other assets 118,331 108,755
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$1,803,557 1,678,620
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 33,893 197,038
Accounts payable and accrued expenses 444,372 393,016
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Total current liabilities 478,265 590,054
Long-term debt, less current portion 579,603 365,979
Deferred income taxes and other long-term liabilities 54,175 31,894
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Total liabilities 1,112,043 987,927
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Total stockholders' equity 691,514 690,693
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$1,803,557 1,678,620
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Dates for Future Press Releases and Conference Calls:
Press Release Conference Call
2nd Qtr. 2000 July 20 July 21 11:00 a.m. (800-603-9255)
3rd Qtr. 2000 October 19 October 20 11:00 a.m. "
4th Qtr. 2001 February 8 February 9 11:00 a.m. "
1st Qtr. 2001 April 18 April 19 11:00 a.m. "
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