Server: Microsoft-IIS/4.0 Date: Thu, 18 Dec 1997 04:44:03 GMT Content-Type: text/html Accept-Ranges: bytes Last-Modified: Sat, 20 Sep 1997 15:38:45 GMT ETag: "c0bbf047dbc5bc1:15814" Content-Length: 26600 Mohawk Industries - Press Releases - 1996 (First Quarter)

Press Releases - 1997 (First Quarter)
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MOHAWK INDUSTRIES, INC. ANNOUNCES
FIRST QUARTER 1997 RESULTS

Calhoun, Georgia, April 17, 1997 - Mohawk Industries, Inc. (NASDAQ/NMS-MOHK) today announced record results for the quarter ended March 29, 1997. Net earnings for the quarter increased 60% to $8,547,000, or $0.25 per share, compared to $5,338,000, or $0.16 per share, for the first quarter 1996. This improvement in net earnings was a result of both higher sales and lower costs. Net sales for the quarter increased 8% to $412,829,000 compared to $383,667,000 for the first quarter 1996. This sales increase was attributable to a gain in market share which the Company believes results from continued emphasis on supporting its independent dealers and strong acceptance of new products introduced during 1996. In addition, the changes in our internal operations and strong cash flow in 1996 added to 1997 profitability through lower manufacturing and interest costs.

In commenting on the first quarter performance, David L. Kolb, Chairman and CEO, stated, "We are very pleased with first quarter results which included an 8% increase in net sales as compared to an industry increase of approximately 4% over the first quarter of 1996. All business segments reflected strong sales growth for the quarter when compared to 1996 resulting in increased market share. We completed the final phase of the systems conversion in our residential division at the end of February with, I am proud to say, virtually no problems. The ongoing changes in our internal operations since 1996 have allowed us to improve service and product quality while reducing production and administrative costs. These steps have allowed us to capitalize on changes in the retail segment and deliver very competitive products to our customers while improving earnings and adding value for our investors. We continue to see our sample expense running higher than usual in order to support the increasing levels of sales and strong sample demand.

The Carpet and Rug Institute’s industry-wide advertising campaign was kicked off during the first quarter of 1997. Mohawk’s contribution to this campaign, approximately $900,000 during the first quarter of 1997, partially offset some of the improvements we experienced in our selling, general and administrative expenses. We continue to believe that this four-year campaign with a targeted annual industry budget of $25,000,000 will benefit both the industry and Mohawk.

Our proposed acquisition of selected assets of Diamond Rug & Carpet Mills, Inc. is included in the plan of reorganization filed by Diamond with the United States Bankruptcy Court in the Northern District of Georgia and is scheduled to close in the third quarter of 1997. Our people have begun planning conversions for manufacturing, order entry and other critical systems to integrate these assets into Mohawk systems immediately after the closing. We believe this proposed acquisition will further enhance our competitive position within the industry.

Finally, I am proud to announce the presentation of three prestigious honors to our commercial division. These include a 1996 Success Track Outstanding Employer award from the Georgia Department of Labor, a regional Existing Industry Appreciation Award from the Georgia Economic Developers Association and the certification of our Landrum, South Carolina mill under the International Organization for Standardization’s ISO 9002 quality system program."

Certain of the statements in the immediately preceding paragraphs regarding the effects of changes to manufacturing, distribution and systems, the Diamond acquisition and the industry-wide advertising campaign 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 implement successfully the manufacturing, distribution and system changes, to consummate the Diamond acquisition and successfully integrate the acquired assets and the effectiveness of the advertising campaign. These or other assumptions 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 area rugs through Karastan and American Rug Craftsmen. The Company markets its products primarily through retailers and commercial dealers.

 

MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES    
Consolidated Statement of Earnings Data
(Amounts in thousands, except per share data)
Three Months Ended
  Mar 29, 1997 Mar 30, 1996 (1)
Net sales $ 412,829 383,667
Cost of sales 318,920 297,494
Gross profit 93,909 86,173
Selling, general and administrative expenses 71,961 68,128
Operating income 21,948 18,045
Interest expense 7,523 8,491
Other expense, net 300 731
Earnings before income taxes 14,125 8,823
Income taxes 5,578 3,485
Net earnings $ 8,547 5,338
Earnings per common and common equivalent share $ 0.25 0.16
Weighted average common and common equivalent shares outstanding 34,876 34,099
     
Consolidated Balance Sheet Data    
(Amounts in thousands)    
  Mar 29, 1997 Mar 30, 1996
ASSETS    
Current assets:    
Receivables 221,420 194,891
Inventories 338,941 335,929
Prepaid expenses 18,804 21,284
Deferred income taxes 18,186 12,858
Total current assets 597,351 564,962
Property, plant and equipment, net 316,292 310,417
Other assets 74,474 75,379
  $ 988,117 950,758
LIABILITIES AND STOCKHOLDERS' EQUITY    
Current liabilities:    
Current portion of long-term debt and note payable $ 20,565 61,262
Accounts payable and accrued expenses 222,276 221,732
Total current liabilities 242,841 282,994
Long-term debt, less current portion 370,948 356,841
Deferred income taxes and other long-term liabilities 32,081 23,721
Total liabilities 645,870 663,556
Total stockholders' equity 342,247 287,202
  $ 988,117 950,758

(1) Certain prior year financial statement balances have been reclassified to conform with the current year's presentation.

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