• Mohawk Industries Reports Q3 Results

    来源: Nasdaq GlobeNewswire / 28 10月 2021 15:10:00   America/Chicago

    CALHOUN, Ga., Oct. 28, 2021 (GLOBE NEWSWIRE) -- Mohawk Industries, Inc. (NYSE: MHK) today announced 2021 third quarter net earnings of $271 million and diluted earnings per share (EPS) of $3.93. Adjusted net earnings were $272 million, and EPS was $3.95, excluding restructuring, acquisition and other charges. Net sales for the third quarter of 2021 were $2.8 billion, up 9.4% as reported and 8.7% on a constant currency basis. For the third quarter of 2020, net sales were $2.6 billion, net profit was $205 million and diluted earnings per share was $2.87, adjusted net earnings were $233 million, and EPS was $3.26, excluding restructuring, acquisition and other charges.

    For the nine months ending October 2, 2021, net earnings and EPS were $844 million and $12.11, respectively. Net earnings excluding restructuring, acquisition and other charges were $828 million and EPS was $11.89. For the 2021 nine-month period, net sales were $8.4 billion, an increase of 22.1% versus prior year as reported or approximately 18% on a constant currency and days basis. For the nine-month period ending September 26, 2020, net sales were $6.9 billion, net earnings were $267 million and EPS was $3.75; excluding restructuring, acquisition and other charges, net earnings and EPS were $379 million and $5.31, respectively.

    Commenting on Mohawk Industries’ third quarter performance, Jeffrey S. Lorberbaum, Chairman and CEO, stated, “All of our businesses performed well, managing through a changing environment. In the period, Covid directly and indirectly impacted many economies, creating supply chain difficulties that disrupted production as well as leading to government lockdowns in Australia, New Zealand, and Malaysia that halted manufacturing and retail. Despite these and other headwinds, our third quarter sales trends continued in most regions, with Europe’s results reflecting normal summer seasonality. Home sales were robust across most geographies, and consumers continued remodeling investments at a strong pace. Year over year, the commercial sector showed improvement, though at a slower rate as Covid concerns delayed the timing of some projects. Our strategies to enhance organizational flexibility, reduce product and operational complexity, and align pricing with costs improved our results.

    “Even with greater external constraints, we ran most of our operations at high levels, and we successfully managed many interruptions across the enterprise. Rather than improving as expected, the availability of labor, materials and transportation became more challenging, resulting in higher costs in the period. Tight chemical supplies, in particular, reduced the output of our LVT, carpet, laminate and board panels. For the near term, we do not foresee significant changes in these external pressures. Due to supply shortages, government regulations and political issues, natural gas costs in Europe are presently about four times higher than earlier in the year. This adds a temporary challenge to our European businesses as the higher costs are reflected in gas, electricity and materials.

    “Most of our businesses are carrying significant order backlogs, and we plan to run our operations at high levels during the fourth period to improve our service and efficiencies. Currently, some of our fastest growing products are being limited by material and capacity constraints. We have initiated additional investments to increase our production of those and increase our sales and service. Completion of these projects is being extended due to longer lead times on building materials and equipment.

    “Our results have improved significantly during 2021, and we generated over $1.9 billion of EBITDA for the trailing 12 months. Given this and our current valuation, our board increased our stock purchase program by an additional $500 million. Since the end of the second quarter, we have bought approximately $250 million of our stock at an average price of $193 per share. With our current low leverage, we have the capital to pursue additional investments and acquisitions to expand our sales and profitability.

    “For the quarter, our Flooring Rest of the World Segment’s sales increased approximately 13% as reported and 11% on a constant currency basis. The segment’s operating margins were 17.4%, as a result of pricing and mix improvements offset by inflation, a return to more normal seasonality in the period and Covid restrictions. During the quarter, sales were strong across our product categories and geographies, outside those affected by government lockdowns. These Covid restrictions have now been lifted, and we are ramping up production to meet demand. Our laminate collections continued to deliver strong sales growth with consumers embracing our proprietary water-proof products for their performance and realistic visuals. We added new laminate capacity in Europe to meet demand, and we are initiating other projects to support further sales growth. As anticipated, our LVT sales were lower during the period given material shortages and lower production that reduced our output. We minimized the impact by improving our product mix and raising prices to pass through inflation. Our Russian sheet vinyl business performed well with sales growing as our distribution expanded. We have acquired a European wood veneer plant to improve supply yields and costs of our wood flooring. Sales of our European insulation panels grew as we implemented another price increase to offset rising material inflation. We have also acquired an insulation manufacturer in Ireland and have begun integrating their operations with our existing business. Our panels business grew, and margins expanded as we increased our mix and pricing. We have added a new press that will increase our capacity and add more differentiated features to our products. In the fourth quarter, we will complete the acquisition of an MDF manufacturer in France to expand our capacity in Western Europe. The company is a pioneer in bio-based resins, which will enhance our sustainability position.

    “During the quarter, our Flooring North America Segment’s sales increased 6.9% as reported and on a constant basis and operating margin increased to approximately 11% from 8% as reported, primarily due to favorable price and mix and productivity improvements, partially offset by inflation. Flooring North America had strong results given the material, transportation and labor constraints impacting our sales and production during the period. We implemented additional price increases across most product categories as inflationary pressures intensified. We continue to streamline our product portfolio and reduce operational complexity benefiting our efficiencies and quality. In carpet, residential was limited by material and labor, which affected our production and costs. Commercial sales improved, though the rate of growth slowed as Covid cases increased. In both residential and commercial manufacturing, we are investing in more efficient assets to improve cost, enhance styling and reduce labor requirements. Our laminate and wood business continues to grow, though our sales were restricted by our capacities. Our new laminate line should be operational by the end of this year to expand our sales and provide more advanced features. Our new high performance UltraWood collections are increasing our mix in wood, and the productivity of our new plant is improving as volume increases. Our LVT sales increased in the period, even with material supply limiting production and shipping delays in our sourced products. We have improved our LVT mix with enhanced features and lowered our cost by streamlining our processes. We are also increasing our sheet vinyl plant’s production to satisfy expanding sales of our collections.

    “For the quarter, our Global Ceramic Segment’s sales increased 9.6% as reported and 9.1% on a constant currency basis. The segment’s operating margin increased to approximately 12% from 8% as reported, primarily due to pricing and mix improvements and favorable productivity, partially offset by inflation. Our U.S. ceramic business grew during the period with the residential sector remaining strong and commercial continuing to show improvement. We are reducing our manufacturing costs by re-engineering our products, utilizing alternative materials and enhancing our logistics strategies. We are introducing higher value products with new printing technologies, textured finishes and polished surfaces to provide alternatives to premium imported tile. Our quartz countertops sales continue to grow substantially as production recovered during the period, and sales of our higher end visuals grew at a faster rate. Our Mexican and Brazilian ceramic businesses are growing, as we increase prices to offset inflation in both countries. We are refining our product offering, improving our efficiencies and increasing our output. In both countries, we are investing in new assets to expand our production and enhance our product offering. Sales in our European ceramic business remained strong as vacation schedules returned to normal. Increases in price, mix and productivity enhanced our results, though they were more than offset by rising inflation. In the period, natural gas and electricity prices in Europe rose to unprecedented levels due to anticipated shortages. Our margins will be negatively impacted until our prices align with energy costs in the future. We are upgrading production lines to further enhance our styling and improve our efficiencies. Sales and margins increased in our Russian ceramic business as enhanced mix and increased prices offset higher inflation. Lower inventories and capacity limitations impacted our sales volumes in the period, and we will continue to manage our mix until our new capacity is operational.

    “Throughout 2021, Mohawk has delivered exceptional results with higher sales growth, margin expansion and robust cash generation. For the fourth quarter, we anticipate that industry seasonality will be more typical, unlike last year when demand was unusually high. In the period, we will run our operations at high levels to support our sales, improve service and increase inventories. Our sales in some categories are being limited by our manufacturing capacities, and we are increasing investments to expand the production of these growing categories. We are continuing to implement additional price increases and manage staffing, supply and transportation constraints across our businesses. We are maintaining aggressive cost management, leveraging technology and enhancing our strategies across the enterprise. In Ceramic Europe, record natural gas prices are increasing net costs by approximately $25 million in the fourth quarter, and it will take some time for the industry to adjust to higher costs. In addition, our fourth quarter calendar has 6% fewer days than the prior year. Given these factors, we anticipate our fourth quarter adjusted EPS to be $2.80 to $2.90, excluding any restructuring charges.

    “Despite temporary challenges from inflation and material availability, our long-term outlook remains optimistic with new home construction and residential remodeling projected to remain robust, and the commercial sector improving as businesses invest and grow. Next year, our sales should grow with capacity expansions and innovative new product introductions. Our strategies to optimize our results continue to evolve with the economic and supply chain conditions. Our balance sheet is the strongest in our history, and it supports increased investments and strategic acquisitions to maximize our growth.”

    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 October 29, 2021, at 11:00 AM Eastern Time
    The telephone number is 1-800-603-9255 for U.S./Canada and 1-706-634-2294 for International/Local. Conference ID # 4259806. A replay will be available until November 29, 2021, by dialing 1-855-859-2056 for U.S./local calls and 1-404-537-3406 for International/Local calls and entering Conference ID # 4259806.


    MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES        
    (Unaudited)        
    Condensed Consolidated Statement of Operations Data Three Months Ended Nine Months Ended
    (Amounts in thousands, except per share data) October 2,2021 September 26, 2020 October 2,2021 September 26, 2020
             
    Net sales $2,817,017  2,574,870   8,439,876  6,910,433 
    Cost of sales  1,979,702  1,868,671   5,908,585  5,217,827 
        Gross profit  837,315  706,199   2,531,291  1,692,606 
    Selling, general and administrative expenses  477,341  443,455   1,449,378  1,339,338 
    Operating income  359,974  262,744   1,081,913  353,268 
    Interest expense  14,948  14,854   45,083  36,481 
    Other (income) expense, net  21  (726)  (13,374) 5,990 
        Earnings before income taxes  345,005  248,616   1,050,204  310,797 
    Income tax expense  73,821  43,163   205,756  43,467 
            Net earnings including noncontrolling interests  271,184  205,453   844,448  267,330 
    Net earnings (loss) attributable to noncontrolling interests  206  336   378  (44)
    Net earnings attributable to Mohawk Industries, Inc. $270,978  205,117   844,070  267,374 
             
    Basic earnings per share attributable to Mohawk Industries, Inc.        
    Basic earnings per share attributable to Mohawk Industries, Inc. $3.95  2.88   12.16  3.76 
    Weighted-average common shares outstanding - basic  68,541  71,197   69,389  71,190 
             
    Diluted earnings per share attributable to Mohawk Industries, Inc.        
    Diluted earnings per share attributable to Mohawk Industries, Inc. $3.93  2.87   12.11  3.75 
    Weighted-average common shares outstanding - diluted  68,864  71,378   69,683  71,362 
             
             
             
    Other Financial Information        
    (Amounts in thousands)        
    Net cash provided by operating activities $498,739  598,499   1,096,735  1,361,994 
    Less: Capital expenditures  147,740  69,143   375,179  265,414 
    Free cash flow $350,999  529,356   721,556  1,096,580 
             
    Depreciation and amortization $148,618  151,342   448,299  450,952 
             
             
    Condensed Consolidated Balance Sheet Data        
    (Amounts in thousands)        
          October 2,2021 September 26, 2020
    ASSETS        
    Current assets:        
        Cash and cash equivalents     $1,128,027  781,238 
        Short-term investments      -  407,784 
        Receivables, net      1,880,476  1,710,961 
        Inventories      2,215,630  1,841,973 
        Prepaid expenses and other current assets      421,944  410,031 
            Total current assets      5,646,077  5,151,987 
    Property, plant and equipment, net      4,442,339  4,405,243 
    Right of use operating lease assets      385,606  303,050 
    Goodwill      2,612,201  2,574,641 
    Intangible assets, net      911,271  918,778 
    Deferred income taxes and other non-current assets      452,806  430,515 
        Total assets     $14,450,300  13,784,214 
    LIABILITIES AND STOCKHOLDERS' EQUITY        
    Current liabilities:        
        Short-term debt and current portion of long-term debt     $588,669  356,130 
        Accounts payable and accrued expenses      2,209,942  1,933,206 
        Current operating lease liabilities      103,132  97,778 
            Total current liabilities      2,901,743  2,387,114 
    Long-term debt, less current portion      1,710,207  2,282,781 
    Non-current operating lease liabilities      292,806  214,654 
    Deferred income taxes and other long-term liabilities      793,095  732,596 
            Total liabilities      5,697,851  5,617,145 
    Total stockholders' equity      8,752,449  8,167,069 
        Total liabilities and stockholders' equity     $14,450,300  13,784,214 
             
    Segment Information Three Months Ended As of or for the Nine Months Ended
    (Amounts in thousands) October 2,2021 September 26, 2020 October 2,2021 September 26, 2020
             
    Net sales:        
        Global Ceramic $998,444  911,303   2,967,818  2,513,088 
        Flooring NA  1,050,453  982,292   3,100,892  2,630,710 
        Flooring ROW  768,120  681,275   2,371,166  1,766,635 
            Consolidated net sales $2,817,017  2,574,870   8,439,876  6,910,433 
             
    Operating income (loss):        
        Global Ceramic $118,896  73,998   343,135  88,166 
        Flooring NA  118,625  74,313   315,866  65,035 
        Flooring ROW  133,595  129,135   456,787  234,429 
        Corporate and intersegment eliminations  (11,142) (14,702)  (33,875) (34,362)
            Consolidated operating income $359,974  262,744   1,081,913  353,268 
             
    Assets:        
        Global Ceramic     $5,174,981  5,111,492 
        Flooring NA      3,960,037  3,626,339 
        Flooring ROW      4,276,310  3,928,243 
        Corporate and intersegment eliminations      1,038,972  1,118,140 
            Consolidated assets     $14,450,300  13,784,214 



    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 Nine Months Ended  
        October 2,2021 September 26, 2020 October 2,2021 September 26, 2020  
    Net earnings attributable to Mohawk Industries, Inc. $270,978  205,117  844,070  267,374   
    Adjusting items:            
    Restructuring, acquisition and integration-related and other costs  1,270  32,168  19,242  144,434   
    Resolution of foreign non-income tax contingencies  -  -  (6,211) -   
    One-time tax planning election   -  -  (26,731) -   
    Income taxes    (203) (4,342) (2,015) (33,144)  
    Adjusted net earnings attributable to Mohawk Industries, Inc. $272,045  232,943  828,355  378,664   
                 
    Adjusted diluted earnings per share attributable to Mohawk Industries, Inc. $3.95  3.26  11.89  5.31   
    Weighted-average common shares outstanding - diluted  68,864  71,378  69,683  71,362   
                 
     
     
                 
    Reconciliation of Total Debt to Net Debt          
    (Amounts in thousands)            
        October 2,2021        
    Short-term debt and current portion of long-term debt $588,669         
    Long-term debt, less current portion   1,710,207         
    Total debt    2,298,876         
    Less: Cash and cash equivalents   1,128,027         
    Net Debt   $1,170,849         
                 
                 
                 
                 
                 
    Reconciliation of Operating Income to Adjusted EBITDA          
    (Amounts in thousands)           Trailing Twelve
        Three Months Ended Months Ended
        December 31, 2020 April 3, 2021 July 3,2021 October 2,2021 October 2,2021
    Operating income   $282,733  317,515  404,424  359,974  1,364,646 
    Other income    6,742  2,227  11,168  (21) 20,116 
    Net income attributable to noncontrolling interests  (176) (4) (168) (206) (554)
    Depreciation and amortization (1)   156,555  151,216  148,466  148,618  604,855 
    EBITDA    445,854  470,954  563,890  508,365  1,989,063 
    Restructuring, acquisition and integration-related and other costs  15,947  6,059  (2,737) 1,208  20,477 
     Adjusted EBITDA   $461,801  477,013  561,153  509,573  2,009,540 
                 
    Net Debt to Adjusted EBITDA          0.6 
    (1) Includes $62 of accelerated depreciation in Q3 2021 with $6,435 in Q4 2020 and $5,818 in Q1 2021 and $2,620 in Q2 2021.       
                 
    Reconciliation of Net Sales to Net Sales on a Constant Exchange Rate and on Constant Shipping Days          
    (Amounts in thousands)            
        Three Months Ended Nine Months Ended  
        October 2,2021 September 26, 2020 October 2,2021 September 26, 2020  
    Net sales   $2,817,017  2,574,870  8,439,876  6,910,433   
    Adjustment to net sales on constant shipping days  -  -  (131,365) -   
    Adjustment to net sales on a constant exchange rate  (19,035) -  (180,752) -   
    Net sales on a constant exchange rate and constant shipping days $2,797,982  2,574,870  8,127,759  6,910,433   
                 
                 
                 
    Reconciliation of Segment Net Sales to Segment Net Sales on a Constant Exchange Rate          
    (Amounts in thousands)            
        Three Months Ended      
    Global Ceramic   October 2,2021 September 26, 2020      
    Net sales   $998,444  911,303       
    Adjustment to segment net sales on a constant exchange rate  (3,967) -       
    Segment net sales on a constant exchange rate $994,477  911,303       
                 
                 
    Reconciliation of Segment Net Sales to Segment Net Sales on a Constant Exchange Rate          
    (Amounts in thousands)            
        Three Months Ended      
    Flooring ROW   October 2,2021 September 26, 2020      
    Net sales   $768,120  681,275       
    Adjustment to segment net sales on a constant exchange rate  (15,069) -       
    Segment net sales on a constant exchange rate $753,051  681,275       
                 
                 
    Reconciliation of Gross Profit to Adjusted Gross Profit          
    (Amounts in thousands)            
        Three Months Ended      
        October 2,2021 September 26, 2020      
    Gross Profit   $837,315  706,199       
    Adjustments to gross profit:            
    Restructuring, acquisition and integration-related and other costs  778  23,585       
      Adjusted gross profit   $838,093  729,784       
                 
                 
                 
    Reconciliation of Selling, General and Administrative Expenses to Adjusted Selling, General and Administrative Expenses        
    (Amounts in thousands)            
        Three Months Ended      
        October 2,2021 September 26, 2020      
    Selling, general and administrative expenses $477,341  443,455       
    Adjustments to selling, general and administrative expenses:          
    Restructuring, acquisition and integration-related and other costs  (521) (8,764)      
      Adjusted selling, general and administrative expenses $476,820  434,691       
              
                 
                 
                 
    Reconciliation of Operating Income to Adjusted Operating Income          
    (Amounts in thousands)            
        Three Months Ended      
        October 2,2021 September 26, 2020      
    Operating income   $359,974  262,744       
    Adjustments to operating income:           
    Restructuring, acquisition and integration-related and other costs  1,299  32,349       
      Adjusted operating income  $361,273  295,093       
                 
                 
    Reconciliation of Segment Operating Income to Adjusted Segment Operating Income          
    (Amounts in thousands)            
        Three Months Ended      
    Global Ceramic   October 2,2021 September 26, 2020      
    Operating income   $118,896  73,998       
    Adjustments to segment operating income:          
    Restructuring, acquisition and integration-related and other costs  212  20,129       
      Adjusted segment operating income  $119,108  94,127       
                 
                 
                 
    Reconciliation of Segment Operating Income to Adjusted Segment Operating Income          
    (Amounts in thousands)            
        Three Months Ended      
    Flooring NA    October 2,2021 September 26, 2020      
    Operating income   $118,625  74,313       
    Adjustments to segment operating income:          
    Restructuring, acquisition and integration-related and other costs  1,396  5,953       
      Adjusted segment operating income  $120,021  80,266       
                 
                 
                 
    Reconciliation of Segment Operating Income to Adjusted Segment Operating Income           
    (Amounts in thousands)            
        Three Months Ended      
    Flooring ROW    October 2,2021 September 26, 2020      
    Operating income   $133,595  129,135       
    Adjustments to segment operating income:          
    Restructuring, acquisition and integration-related and other costs  (228) 2,019       
      Adjusted segment operating income  $133,367  131,154       
                 
                 
                 
    Reconciliation of Earnings Including Noncontrolling Interests Before Income Taxes to Adjusted Earnings Including Noncontrolling Interests Before Income Taxes    
    (Amounts in thousands)            
        Three Months Ended      
        October 2,2021 September 26, 2020      
    Earnings before income taxes  $345,005  248,616       
    Net earnings attributable to noncontrolling interests  (206) (336)      
    Adjustments to earnings including noncontrolling interests before income taxes:          
    Restructuring, acquisition and integration-related and other costs  1,270  32,168       
      Adjusted earnings including noncontrolling interests before income taxes $346,069  280,448       
                 
                 
                 
                 
    Reconciliation of Income Tax Expense to Adjusted Income Tax Expense          
    (Amounts in thousands)            
        Three Months Ended      
        October 2,2021 September 26, 2020      
    Income tax expense   $73,821  43,163       
    Income tax effect of adjusting items   203  4,342       
      Adjusted income tax expense  $74,024  47,505       
                 
    Adjusted income tax rate    21.4% 16.9%      
                 
    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.  



    Contact:         

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


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