Server: Microsoft-IIS/4.0 Date: Thu, 18 Dec 1997 04:43:14 GMT Content-Type: text/html Accept-Ranges: bytes Last-Modified: Fri, 19 Sep 1997 22:33:06 GMT ETag: "72ac1b04cc5bc1:15814" Content-Length: 16643 Mohawk Industries - Press Releases - 1996 (First Quarter)

Press Releases - 1996 (First Quarter)
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MOHAWK INDUSTRIES, INC. ANNOUNCES
FIRST QUARTER 1996 RESULTS

Calhoun, Georgia, April 17, 1996 - Mohawk Industries, Inc. (NASDAQ/NMS-MOHK) today announced results for the quarter ended March 30, 1996. Net sales for the quarter increased 1% to $383,667,000 compared to $378,761,000 for the first quarter of 1995. This sales increase was achieved despite severe winter conditions in major areas of the country which slowed carpet sales for the industry overall. Net earnings increased 24% to $5,338,000 or $0.16 per share compared to $4,307,000, or $0.13 per share, for the first quarter 1995. The increase in earnings is primarily attributable to savings realized from manufacturing consolidations and raw material cost reductions.

The gross profit as a percent of net sales was 22.7% for the quarter as compared to 21.6% for first quarter 1995. This increase is due to the manufacturing consolidations and raw material cost reductions. The Company's integration of the manufacturing, distribution and information systems areas is progressing as planned and has started contributing to the margin improvement. However, the price of polypropylene chips has increased slightly since the end of the quarter.

Selling, general and administrative expenses have increased to 18.0% of net sales in 1996 as compared to 17.2% in 1995. This increase is primarily attributable to higher sample costs in 1996. The Company believes that dealer orders for product samples have increased in response to a competitor's recent move into retail operations.

In commenting on the first quarter performance, David L. Kolb, Chairman and CEO, stated, "We are encouraged by our first quarter financial results and the progress of our residential operations consolidation. As we continue to assimilate these operations by consolidating plants and administrative functions, establishing decentralized regional sales management teams, expanding our nationwide distribution system and installing a company-wide management information system, improvements are being realized each month. We believe the first quarter results reflect some of the benefits to be realized from these changes.

In addition, we want to reemphasize that Mohawk Industries is committed to supporting, maintaining and improving the competitive position of our independent retailers through the strength of our products, services, brands, people and resources. Recent improvements in our infrastructure and over $170 million investment in capital expenditures and acquisitions over the last two fiscal years have focused on being more responsive to our retail customer. We continue to study the strategy of our competitor's retailing effort to determine how our Company can align with retailers and ensure our mutual success. We believe the independent regionally responsive retailer will prevail over a centrally controlled retail chain and we plan to support this approach going forward."

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," "Eden," "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 30, 1996 Apr 1, 1995(1)
Net sales $ 383,667 378,761
Cost of sales   296,483 296,843
Gross profit   87,184 81,918
Selling, general and administrative expenses   69,139 65,263
Operating income   18,045 16,655
Interest expense   8,491 9,024
Other expense, net   731 603
Earnings before income taxes   8,823 7,028
Income taxes   3,485 2,721
Net earnings $ 5,338 4,307
Earnings per common and common equivalent share $ 0.16 0.13
Weighted average common and common equivalent shares outstanding   34,099 33,687

Consolidated Balance Sheet Data

(Amounts in thousands)



Mar 30, 1996 Apr 1, 1995 (1)

ASSETS




Current assets:




Receivables $ 194,891 218,399
Inventories
335,929 332,900
Prepaid expenses
21,284 21,631
Deferred income taxes
12,858 13,217
Total current assets
564,962 586,147
Property, plant and equipment, net
310,417 370,768
Other assets
75,379 61,051
Total assets $ 950,758 1,017,966

LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:




Current portion of long-term debt and note payable $ 61,262 55,497
Accounts payable and accrued expenses
221,732 214,928
Total current liabilities
282,994 270,425
Long-term debt
356,841 443,316
Deferred income taxes and other long-term liabilities
23,721 35,291
Total liabilities
663,556 749,032
Total stockholders' equity
287,202 268,934
Total liabilities and stockholders' equity $ 950,758 1,017,966

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

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