• Mohawk Industries Reports Q1 Results

    Источник: Nasdaq GlobeNewswire / 29 апр 2021 15:10:00   America/Chicago

    CALHOUN, Georgia, April 29, 2021 (GLOBE NEWSWIRE) -- Mohawk Industries, Inc. (NYSE: MHK) today announced 2021 first quarter net earnings of $237 million and diluted earnings per share (EPS) of $3.36. Adjusted net earnings were $246 million, and EPS was $3.49, excluding restructuring, acquisition and other charges. Net sales for the first quarter of 2021 were $2.7 billion, up 16.8% as reported and 9.1% on a constant currency and days basis. For the first quarter of 2020, net sales were $2.3 billion, net earnings were $111 million and EPS was $1.54, adjusted net earnings were $119 million, and EPS was $1.66, excluding restructuring, acquisition and other charges.

    Commenting on Mohawk Industries’ first quarter performance, Jeffrey S. Lorberbaum, Chairman and CEO, stated, “Our outstanding performance in the period included all-time record sales and our highest ever first quarter EPS. Our business continued to strengthen in the period and did not reflect our industry’s normal seasonality. Around the world, consumers are continuing to invest in their homes, and new flooring has a major role in most remodeling projects. We are also starting to see moderate improvement in commercial demand as global economies expand and businesses begin to invest in anticipation of a return to normal.

    “Market demand strengthened as the period progressed, and our order backlog remains robust going into the second quarter. Most of our businesses are running at high production rates, though our inventories remain lower than we would like. Our production and operating costs were impacted in the period by supply limitations in most of our markets, as well as absenteeism, new employee training and severe weather in the U.S. Our margins have benefited from stronger consumer demand, our restructuring and productivity actions and leverage on SG&A costs. We have increased prices in most product categories and geographies, reflecting inflation in raw materials, labor, energy and transportation. Global transportation capacity has been limited, increasing our cost and delaying receipt of our imported products. We have seen similar constraints on local shipments and are increasing our freight rates to respond.”

    “We continue to implement our restructuring plans and have achieved approximately $75 million of our anticipated $100 to $110 million in savings. In the first quarter, we purchased $123 million of our stock at an average price of approximately $179 for a total of $686 million since we initiated our purchasing program. Our balance sheet remains strong with net debt less short-term investments of $1.3 billion, reflecting leverage at a historically low level for the Company.

    “For the quarter, our Flooring Rest of the World Segment’s sales increased 30.7% as reported and 14.6% on a constant currency and days basis. The segment’s operating margins increased 780 basis points to 20.7% as reported. The increase was due to higher volume, favorable price and product mix, increased productivity and favorable exchange rates, partially offset by inflation. Q1 benefited from lower marketing expenses, product mix and increased days which resulted in a greater margin in the period. During the period, most of our facilities ran at high levels, though some supply constraints limited our utilization. We anticipate some material shortages continuing at least in the second quarter. Our laminate business, the segment’s largest product category, continues to record significant growth as consumers embrace our more realistic visuals and superior performance. In the second quarter, we are installing additional laminate manufacturing assets to support further growth. Our LVT sales rose substantially, and our margins expanded due to enhanced formulations and increased production speeds. Our sheet vinyl sales were limited by Covid lockdowns of our retailers in Europe. Our Russian sheet vinyl business continues to expand rapidly as we broaden our customer base and product offering. Our insulation business continues to grow, though material supply and cost increases pressured our margin. Our wood panels business delivered improved performance and we are installing a new melamine press to increase higher value sales and efficiencies. Our sales and margins in both Australia and New Zealand expanded significantly by leveraging our comprehensive soft and hard surface collections, strong sales organization and industry-leading service.

    “During the quarter, our Flooring North America Segment’s sales increased 14.3% as reported and approximately 9% on a constant basis and operating margin was 8.4% as reported, increasing 410 basis points. Operating income for the segment increased primarily due to higher volume and productivity, partially offset by inflation. Our order rates remain strong and our backlog is higher than normal. All of our operations are maximizing their output as we managed interference from labor shortages and supply constraints. Our residential carpet sales improved with retail remodeling improving sales of our premium products. Our commercial business continued to improve sequentially from its trough with growing investments in new projects. Our laminate sales are setting records as the appeal of our realistic visuals and water-proof performance expands across all channels. We have significantly increased our domestic laminate production and are supplementing with imports from our global operations. We are installing additional laminate production to further expand our sales by the end of this year. Our LVT sales continue to increase as we expand our offering and our local manufacturing has continued its improvement as we implemented processes similar to our European operations.   We are ramping up production of our premium Ultrawood, the first water-proof natural wood flooring that also features industry-leading scratch, dent and fade resistance.

    “For the quarter, our Global Ceramic Segment’s sales increased 9.6% as reported and 5.4% on a constant currency and days basis. The segment’s operating margin increased 370 basis points to 9.4% as reported, primarily due to favorable price and mix, higher volumes and increased productivity, partially offset by inflation. Our U.S. plants are running at higher levels, and we have increased our productivity with our restructuring actions. Our quartz plant is improving its productivity and we are introducing more sophisticated veined collections which are increasing our mix and should enhance our margins. In the period, the ice storm that hit the southwest temporarily stopped production at most of our manufacturing facilities by interrupting our electricity and natural gas supply. The facilities have all recovered and are operating as expected, improving our service. Our European ceramic business delivered a strong performance, driven by productivity, improving mix and greater consumer demand. Our Russian, Brazilian and Mexican ceramic businesses delivered strong results, though they were limited by their capacities. In all three businesses, we are maximizing output and allocating production as necessary. In Brazil and Mexico, we are increasing capacity this year to improve our sales and mix. In Russia, we are optimizing our tile production and ramping up our new premium sanitary ware plant to meet growing demand.

    “As we progress through the year, we anticipate that historically low interest rates, government actions and fewer pandemic restrictions should improve our markets around the world. Vaccination programs should keep people safer and reduce the risk of further Covid-related disruption. We foresee the present robust residential trends continuing with commercial sales slowly improving in the second period. Across the enterprise, we will increase product introductions that provide additional features and benefits to strengthen our offering and margins. We are enhancing our manufacturing operations to increase our volume and efficiencies, while executing our ongoing cost savings programs. Our suppliers indicate that material availability should improve from the first quarter, though some operations could still face future supply constraints. We are managing challenging labor markets in some of our U.S. communities, and supplemental federal unemployment programs could interfere with staffing to maximize those operations. If raw material, energy and transportation costs continue to rise, further price increases could be required around the world. Given these factors, we anticipate our second quarter adjusted EPS to be $3.57 to $3.67, excluding any restructuring charges.

    “Currently, our strong order backlog reflects the escalated levels of residential demand across the globe. We are introducing new product innovations to enhance our offering and customers sales and optimizing our production to improve our service. We are preparing for an improvement in commercial projects, anticipating an economic expansion and a return to normal business investments. With strong liquidity and historically low leverage, we will increase our capital investments and take advantage of additional opportunities to expand.”

    ABOUT MOHAWK INDUSTRIES

    Mohawk Industries is the leading global flooring manufacturer that creates products to enhance residential and commercial spaces around the world. Mohawk’s vertically integrated manufacturing and distribution processes provide competitive advantages in the production of carpet, rugs, ceramic tile, laminate, wood, stone and vinyl flooring. Our industry leading innovation has yielded products and technologies that differentiate our brands in the marketplace and satisfy all remodeling and new construction requirements. Our brands are among the most recognized in the industry and include American Olean, Daltile, Durkan, Eliane, Feltex, Godfrey Hirst, IVC, Karastan, Marazzi, Mohawk, Mohawk Group, Pergo, Quick-Step and Unilin. During the past decade, Mohawk has transformed its business from an American carpet manufacturer into the world’s largest flooring company with operations in Australia, Brazil, Canada, Europe, India, Malaysia, Mexico, New Zealand, Russia and the United States.

    Certain of the statements in the immediately preceding paragraphs, particularly anticipating future performance, business prospects, growth and operating strategies and similar matters and those that include the words “could,” “should,” “believes,” “anticipates,” “expects,” and “estimates,” or similar expressions constitute “forward-looking statements.” 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. There can be no assurance that the forward-looking statements will be accurate because they are based on many assumptions, which involve risks and uncertainties. The following important factors could cause future results to differ: changes in economic or industry conditions; competition; inflation and deflation in raw material prices and other input costs; inflation and deflation in consumer markets; energy costs and supply; timing and level of capital expenditures; timing and implementation of price increases for the Company’s products; impairment charges; integration of acquisitions; international operations; introduction of new products; rationalization of operations; taxes and tax reform, product and other claims; litigation; and other risks identified in Mohawk’s SEC reports and public announcements.

    Conference call April 30, 2021, at 11:00 AM Eastern Time

    The telephone number is 1-800-603-9255 for US/Canada and 1-706-634-2294 for International/Local. Conference ID # 6084517. A replay will be available until May 30, 2021, by dialing 1-855-859-2056 for US/local calls and 1-404-537-3406 for International/Local calls and entering Conference ID # 6084517.

    Contact: James Brunk, Chief Financial Officer (706) 624-2239

     
    MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES
    (Unaudited)
    Condensed Consolidated Statement of Operations DataThree Months Ended
    (Amounts in thousands, except per share data)April 3, 2021 March 28, 2020
        
    Net sales$2,669,026  2,285,763 
    Cost of sales 1,877,257  1,669,323 
    Gross profit 791,769  616,440 
    Selling, general and administrative expenses 474,254  464,957 
    Operating income 317,515  151,483 
    Interest expense 15,241  8,671 
    Other (income) expense, net (2,227) 5,679 
    Earnings before income taxes 304,501  137,133 
    Income tax expense 67,690  26,668 
    Net earnings including noncontrolling interests 236,811  110,465 
    Net earnings (loss) attributable to noncontrolling interests 4  (49)
    Net earnings attributable to Mohawk Industries, Inc.$236,807  110,514 
        
    Basic earnings per share attributable to Mohawk Industries, Inc.   
    Basic earnings per share attributable to Mohawk Industries, Inc.$3.37  1.54 
    Weighted-average common shares outstanding - basic 70,179  71,547 
        
    Diluted earnings per share attributable to Mohawk Industries, Inc.   
    Diluted earnings per share attributable to Mohawk Industries, Inc.$3.36  1.54 
    Weighted-average common shares outstanding - diluted 70,474  71,777 
        
        
    Other Financial Information   
    (Amounts in thousands)   
    Net cash provided by operating activities$259,605  194,974 
    Less: Capital expenditures 114,735  115,632 
    Free cash flow$144,870  79,342 
        
    Depreciation and amortization$151,216  145,516 
        
        
    Condensed Consolidated Balance Sheet Data   
    (Amounts in thousands)   
     April 3, 2021 March 28, 2020
    ASSETS   
    Current assets:   
    Cash and cash equivalents$557,262  263,086 
    Short-term investments 782,267  60,300 
    Receivables, net 1,813,858  1,644,750 
    Inventories 1,996,628  2,195,434 
    Prepaid expenses and other current assets 415,997  449,461 
    Total current assets 5,566,012  4,613,031 
    Property, plant and equipment, net 4,432,110  4,472,913 
    Right of use operating lease assets
     337,767  331,329 
    Goodwill 2,594,727  2,519,979 
    Intangible assets, net 921,846  904,023 
    Deferred income taxes and other non-current assets 437,611  415,667 
    Total assets$14,290,073  13,256,942 
    LIABILITIES AND STOCKHOLDERS' EQUITY   
    Current liabilities:   
    Short-term debt and current portion of long-term debt$953,913  1,210,525 
    Accounts payable and accrued expenses 1,954,396  1,554,085 
    Current operating lease liabilities 98,982  106,673 
    Total current liabilities 3,007,291  2,871,283 
    Long-term debt, less current portion 1,719,115  1,514,000 
    Non-current operating lease liabilities 248,022  238,830 
    Deferred income taxes and other long-term liabilities 816,613  785,186 
    Total liabilities 5,791,041  5,409,299 
    Total stockholders' equity 8,499,032  7,847,643 
    Total liabilities and stockholders' equity$14,290,073  13,256,942 
        
      
    Segment InformationAs of or for the Three Months Ended
    (Amounts in thousands)April 3, 2021 March 28, 2020
        
    Net sales:   
    Global Ceramic$929,871  848,450 
    Flooring NA 969,250  848,330 
    Flooring ROW 769,905  588,983 
    Consolidated net sales$2,669,026  2,285,763 
        
    Operating income (loss):   
    Global Ceramic$87,804  47,976 
    Flooring NA 81,298  36,206 
    Flooring ROW 159,306  75,816 
    Corporate and intersegment eliminations (10,893) (8,515)
    Consolidated operating income (a)$317,515  151,483 
        
    Assets:   
    Global Ceramic$5,161,660  5,237,631 
    Flooring NA 3,731,032  3,841,815 
    Flooring ROW 4,120,381  3,810,348 
    Corporate and intersegment eliminations 1,277,000  367,148 
    Consolidated assets$14,290,073  13,256,942 
        
    (a)During the second quarter of 2020, the Company revised the methodology it uses to estimate and allocate corporate general and administrative expenses to its operating segments to better align usage of corporate resources allocated to the Company segments.  The updated allocation methodology had no impact on the Company’s consolidated statements of operations.  This change was applied retrospectively, and segment operating income for all comparative periods has been updated to reflect this change.
     


    Reconciliation of Net Earnings Attributable to Mohawk Industries, Inc. to Adjusted Net Earnings Attributable to Mohawk Industries, Inc. and Adjusted Diluted Earnings Per Share Attributable to Mohawk Industries, Inc.                                                 
    (Amounts in thousands, except per share data)         
       Three Months Ended  
         April 3, 2021 March 28, 2020  
    Net earnings attributable to Mohawk Industries, Inc.    $236,807  110,514   
    Adjusting items:         
    Restructuring, acquisition and integration-related and other costs     11,877  11,930   
    Income taxes     (2,735) (3,080)  
    Adjusted net earnings attributable to Mohawk Industries, Inc.    $245,949  119,364   
              
    Adjusted diluted earnings per share attributable to Mohawk Industries, Inc.    $3.49  1.66   
    Weighted-average common shares outstanding - diluted     70,474  71,777   
              
     
    Reconciliation of Total Debt to Net Debt Less Short-Term Investments
    (Amounts in thousands)         
     April 3, 2021        
    Short-term debt and current portion of long-term debt$953,913         
    Long-term debt, less current portion 1,719,115         
    Total debt 2,673,028         
    Less: Cash and cash equivalents 557,262         
    Net Debt 2,115,766         
    Less: Short-term investments 782,267         
    Net debt less short-term investments$1,333,499         
              
              
    Reconciliation of Operating Income (Loss) to Adjusted EBITDA
    (Amounts in thousands)        Trailing Twelve
     Three Months Ended Months Ended
     June 27, 2020 September 26, 2020 December 31, 2020 April 3, 2021 April 3, 2021
    Operating income (loss)$(60,958) 262,744   282,733  317,515  802,034 
    Other (expense) income (1,037) 726   6,742  2,227  8,658 
    Net (income) loss attributable to noncontrolling interests 331  (336)  (176) (4) (185)
    Depreciation and amortization (1) 154,094  151,342   156,555  151,216  613,207 
    EBITDA 92,430  414,476   445,854  470,954  1,423,714 
    Restructuring, acquisition and integration-related and other costs 91,940  26,925   15,947  6,059  140,871 
    Adjusted EBITDA$184,370  441,401   461,801  477,013  1,564,585 
              
    Net Debt less short-term investments to Adjusted EBITDA        0.9 
    (1) Includes $5,818 of accelerated depreciation in Q1 2021 with $8,395 in Q2 2020, $5,243 in Q3 2020 and $6,435 in Q4 2020.
              
              
    Reconciliation of Net Sales to Net Sales on a Constant Exchange Rate and on Constant Shipping Days 
    (Amounts in thousands)         
     Three Months Ended    
     April 3, 2021 March 28, 2020    
    Net sales$2,669,026  2,285,763     
    Adjustment to net sales on constant shipping days (110,948) -     
    Adjustment to net sales on a constant exchange rate (63,899) -     
    Net sales on a constant exchange rate and constant shipping days$2,494,179  2,285,763     
              
              
    Reconciliation of Segment Net Sales to Segment Net Sales on a Constant Exchange Rate and on Constant Shipping Days
    (Amounts in thousands)         
     Three Months Ended      
    Global CeramicApril 3, 2021 March 28, 2020      
    Net sales$929,871  848,450       
    Adjustment to segment net sales on constant shipping days (33,930) -       
    Adjustment to segment net sales on a constant exchange rate (1,421) -       
    Segment net sales on a constant exchange rate and constant shipping days$894,520  848,450       
              
              
    Reconciliation of Segment Net Sales to Segment Net Sales on Constant Shipping Days 
    (Amounts in thousands)         
     Three Months Ended      
    Flooring NAApril 3, 2021 March 28, 2020      
    Net sales$969,250  848,330       
    Adjustment to segment net sales on constant shipping days (44,735) -       
    Segment net sales on constant shipping days$924,515  848,330       
              
              
    Reconciliation of Segment Net Sales to Segment Net Sales on a Constant Exchange Rate and on Constant Shipping Days
    (Amounts in thousands)         
     Three Months Ended      
    Flooring ROWApril 3, 2021 March 28, 2020      
    Net sales$769,905  588,983       
    Adjustment to segment net sales on constant shipping days (32,283) -       
    Adjustment to segment net sales on a constant exchange rate (62,479) -       
    Segment net sales on a constant exchange rate and constant shipping days$675,143  588,983       
              
              
    Reconciliation of Gross Profit to Adjusted Gross Profit
    (Amounts in thousands)         
     Three Months Ended      
     April 3, 2021 March 28, 2020      
    Gross Profit$791,769  616,440       
    Adjustments to gross profit:         
    Restructuring, acquisition and integration-related and other costs 10,485  11,080       
    Adjusted gross profit$802,254  627,520       
              
              
    Reconciliation of Selling, General and Administrative Expenses to Adjusted Selling, General and Administrative Expenses
    (Amounts in thousands)         
     Three Months Ended      
     April 3, 2021 March 28, 2020      
    Selling, general and administrative expenses$474,254  464,957       
    Adjustments to selling, general and administrative expenses:         
    Restructuring, acquisition and integration-related and other costs (1,002) (895)      
    Adjusted selling, general and administrative expenses$473,252  464,062       
              
              
    Reconciliation of Operating Income to Adjusted Operating Income
    (Amounts in thousands)         
     Three Months Ended      
     April 3, 2021 March 28, 2020      
    Operating income$317,515  151,483       
    Adjustments to operating income:         
    Restructuring, acquisition and integration-related and other costs 11,487  11,975       
    Adjusted operating income$329,002  163,458       
              
              
    Reconciliation of Segment Operating Income to Adjusted Segment Operating Income
    (Amounts in thousands)         
     Three Months Ended      
    Global CeramicApril 3, 2021 March 28, 2020      
    Operating income$87,804  47,976       
    Adjustments to segment operating income:         
    Restructuring, acquisition and integration-related and other costs 1,273  (122)      
    Adjusted segment operating income$89,077  47,854       
              
              
    Reconciliation of Segment Operating Income to Adjusted Segment Operating Income
    (Amounts in thousands)         
     Three Months Ended      
    Flooring NA April 3, 2021 March 28, 2020      
    Operating income$81,298  36,206       
    Adjustments to segment operating income:         
    Restructuring, acquisition and integration-related and other costs 8,859  8,067       
    Adjusted segment operating income$90,157  44,273       
              
              
    Reconciliation of Segment Operating Income to Adjusted Segment Operating Income 
    (Amounts in thousands)         
     Three Months Ended      
    Flooring ROW April 3, 2021 March 28, 2020      
    Operating income$159,306  75,816       
    Adjustments to segment operating income:         
    Restructuring, acquisition and integration-related and other costs 1,357  3,969       
    Adjusted segment operating income$160,663  79,785       
              
              
    Reconciliation of Earnings Including Noncontrolling Interests Before Income Taxes to Adjusted Earnings Including Noncontrolling Interests Before Income Taxes
    (Amounts in thousands)         
     Three Months Ended      
     April 3, 2021 March 28, 2020      
    Earnings before income taxes$304,501  137,133       
    Net (earnings) loss attributable to noncontrolling interests (4) 49       
    Adjustments to earnings including noncontrolling interests before income taxes:         
    Restructuring, acquisition and integration-related and other costs 11,877  11,930       
    Adjusted earnings including noncontrolling interests before income taxes$316,374  149,112       
              
              
    Reconciliation of Income Tax Expense to Adjusted Income Tax Expense
    (Amounts in thousands)         
     Three Months Ended      
     April 3, 2021 March 28, 2020      
    Income tax expense$67,690  26,668       
    Income tax effect of adjusting items 2,735  3,080       
    Adjusted income tax expense$70,425  29,748       
              
    Adjusted income tax rate 22.3% 20.0%      
              
    The Company supplements its condensed consolidated financial statements, which are prepared and presented in accordance with US GAAP, with certain non-GAAP financial measures. As required by the Securities and Exchange Commission rules, the tables above present a reconciliation of the Company's non-GAAP financial measures to the most directly comparable US GAAP measure. Each of the non-GAAP measures set forth above should be considered in addition to the comparable US GAAP measure, and may not be comparable to similarly titled measures reported by other companies. The Company believes these non-GAAP measures, when reconciled to the corresponding US GAAP measure, help its investors as follows: Non-GAAP revenue measures that assist in identifying growth trends and in comparisons of revenue with prior and future periods and non-GAAP profitability measures that assist in understanding the long-term profitability trends of the Company's business and in comparisons of its profits with prior and future periods.
              
    The Company excludes certain items from its non-GAAP revenue measures because these items can vary dramatically between periods and can obscure underlying business trends. Items excluded from the Company's non-GAAP revenue measures include: foreign currency transactions and translation and the impact of acquisitions.
              
    The Company excludes certain items from its non-GAAP profitability measures because these items may not be indicative of, or are unrelated to, the Company's core operating performance. Items excluded from the Company's non-GAAP profitability measures include: restructuring, acquisition and integration-related and other costs, acquisition purchase accounting, including inventory step-up, release of indemnification assets and the reversal of uncertain tax positions.

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