Cleaning & Restoration Breaking News

Mohawk Industries Announces Record First Quarter Earnings

CALHOUN, Ga., April 21 /PRNewswire-FirstCall/ -- Mohawk Industries, Inc. today announced record first quarter net earnings of $66,307,000 and diluted earnings per share of $0.98 for the first quarter of 2004. This compares to $41,640,000 in net earnings and $0.62 in EPS for the first quarter of 2003.

This improvement was the result of strong sales growth and increased operating income. Net sales for the quarter increased 28% to $1,391,261,000 from $1,084,715,000 in 2003. This increase was primarily the result of strong organic growth of both Mohawk and Dal-Tile products and the Lees Carpet acquisition.

Additionally, the fiscal calendar for 2004 when compared to 2003, increased by four days in the first quarter and decreased by four days in the fourth quarter which added approximately 7% to sales in the first quarter of 2004.

The Mohawk segment net sales of $1,031,978,000 in the first quarter of 2004 were up 28% from $808,111,000 primarily due to improving sales across all product categories and the Lees acquisition. The Dal-Tile segment net sales of $359,283,000 in the first quarter of 2004 grew 30% from $276,604,000 primarily from organic growth in the tile and stone businesses.

In commenting on the first quarter results, Jeffrey S. Lorberbaum, President and CEO, stated, "All of our businesses turned in outstanding results this quarter with each product category experiencing organic revenue growth as well as increased operating earnings. The operating profits in the first quarter were surprisingly good given the unanticipated rise in natural gas, oil and commodity prices along with the resulting increase in carpet material, energy and distribution costs. The soft surface products all rebounded from the economically depressed first quarter of 2003. The hard surface product growth continues to be strong as a result of a broader offering, improved service and greater customer support. The regional market meetings that were completed in the first quarter were very successful resulting in a more effective and timely roll out of new products and programs. New product placements were implemented earlier with strong support from our retailers.

"Our operating margin for the quarter increased to 8.6% of net sales in 2004 from 7.2% in 2003. This improvement results from increased sales, higher gross profit margins and lower selling, general and administrative expenses as a percentage of net sales. We were able to accomplish this even with significant cost increases for raw materials, sourced product and energy. Our cash flow remains strong with an improving debt to capitalization ratio of 30% as we move into a much stronger economic environment.

"The strong economy has fueled sales growth in the flooring industry. We have experienced significant improvements in the residential sector with the commercial sector continuing its turnaround. The persistently high oil and natural gas costs are currently affecting the economy and our industry. Almost all of our materials in carpet have had substantial increases in price. Since December, we have announced three carpet price increases to our customers to offset our rising costs. These price increases will be fully implemented during the second quarter.

"The integration of our Lees Carpet acquisition has progressed rapidly with all information systems fully integrated including operational, administrative and financial systems. We have increased inventories in the first quarter to support the business and improve service levels. New products are being introduced to update the product line and grow sales in the future. In addition, a value line of carpet tile has been introduced under the Mohawk Commercial brand and will not compete with Lees value-added approach. Lees was accretive to our earnings in the first quarter.

"Mohawk and Dal-Tile hard surface products continued their strong performance in the first quarter of 2004. Our new product introductions have been well received. Price increases have been implemented to offset higher costs and a weaker dollar.

"Finally, we are proud to report that Mohawk was named 'Vendor of the Year' by Lowe's, Sherwin Williams, Target, and Fred Meyer which reflects the emphasis we place on product development, service and our value-added approach. In addition, we were pleased to receive the 'Best Buy' award from Consumer Digest for value in multiple products in ceramic tile and wood products. Mohawk was also placed at 349 on the Fortune 500 list and number 848 on the Forbes 2000 list."

The company believes strong economic growth will continue throughout the year. The second quarter of 2004 earnings forecast is from $1.27 to $1.34 EPS.

Did you enjoy this article? Click here to subscribe to i Cleaning Specialist Magazine.

You must login or register in order to post a comment.

Multimedia

Videos

Image Galleries

The 2014 Experience Conference and Exhibition

A look in photos at the 2014 Experience Conference and Exhibition, which was held from April 24-26 at the Embassy Suites Convention Center and Spa in Frisco, Texas.

Podcasts

Beginning April 21, Google will start judging websites based on their mobile friendliness. What exactly does this mean to you cleaning website? Find out in the latest edition of The Hitman Advertising Show, which will also cover tips and suggestions on getting mobile compliant.
More Podcasts

ICS Cleaning Specialist Magazine

CoverImage

2015 April

The April ICS issue features content on concrete polishing, green cleaning, air duct cleaning, injection sprayers and new products.

Table Of Contents Subscribe

Janitorial Work

In addition to residential and commercial carpet cleaning, do you do any janitorial work on the side?
View Results Poll Archive

THE ICS STORE

FinalCover.gif
The Carpet Cleaner's Book of Unlimited Success! (ebook)

Don’t worry about the recession or about your competition.  Now you can be the owner of over 400 ways for carpet cleaning professionals to make more money and get more jobs!

More Products

ICS DIRECTORY AND BUYING GUIDE

Director_Buyer.jpgThe premier resource and reference guide for the cleaning and restoration industries.

Click here to view

STAY CONNECTED

facebook_40.png twitter_40px.png youtube_40px.png

TRUCKMOUNT EQUIPMENT AND ACCESSORIES GUIDE

Truckmount.jpgEquipment listings and specifications from the leading industry manufacturers.

Click here to view