Mohawk Industries, Inc. Announces Fourth Quarter Earnings
-- Record Q4 Adjusted EPS; 27% Increase Over PY
-- Adjusted Operating Income Up 160 bps
CALHOUN, Georgia, Feb. 19, 2015 /PRNewswire/ -- Mohawk Industries, Inc. (NYSE: MHK) today announced 2014 fourth quarter net earnings of $147 million and diluted earnings per share (EPS) of $2.00. Excluding unusual charges, net earnings were $167 million and EPS was $2.27, a 27% increase over last year's fourth quarter adjusted EPS and the highest Q4 adjusted EPS in the company's history. Net sales for the fourth quarter of 2014 were $1.95 billion, an increase of 1.4% versus the prior year's fourth quarter or approximately 5% on a constant exchange basis. For the fourth quarter of 2013, net sales were $1.92 billion, net earnings were $95 million and EPS was $1.29; excluding unusual charges, net earnings were $131 million and EPS was $1.79.
For the twelve months ending December 31, 2014, net sales were $7.8 billion, an increase of 6% versus the prior year as reported or 7% on a constant exchange basis. Net earnings and EPS for the twelve month period were $532 million and $7.25, respectively. Net earnings excluding unusual charges were $598 million and adjusted EPS was $8.15, an increase of 24% over the twelve month adjusted EPS results in 2013. For the twelve months ending December 31, 2013, net sales were $7.3 billion, net earnings were $349 million and EPS was $4.82; excluding unusual charges, net earnings and EPS were $473 million and $6.55, respectively.
Commenting on Mohawk Industries' fourth quarter performance, Jeffrey S. Lorberbaum, Chairman and CEO, stated, "During the period, we significantly increased our adjusted operating income by 18% compared to the prior year as a result of productivity initiatives, aggressive cost containment and benefits from our acquisitions. We delivered solid results during the quarter, generating increased earnings even with negative translation impact from foreign currency. On a local basis, our European operations improved across all product categories in a challenging market. Across the enterprise, we reduced SG&A as a percentage of sales and held total dollars flat while still investing in growth areas of the business."
Carpet segment net sales for the quarter were $780 million, up 4% over last year. Our adjusted operating income increased approximately 32% over the prior year to 11%, producing our best quarterly performance in over a decade. We continue to benefit from product innovation, enhanced raw material strategies, plant simplification, investments in state-of-the-art technologies and improved sales execution. In the quarter, we introduced SmartStrand® Forever Clean™, the next generation of our exclusive franchise, which was selected by retailers at the national flooring trade show in January as the most innovative new product in any flooring category. Forever Clean combines SmartStrand's luxurious softness and exceptional durability with exclusive Nanoloc™ spill protection for quick and easy clean-up. The company continued to expand its Continuum™ polyester offering, which is gaining momentum across all price points. In commercial carpet, the business improved both top line growth and margins as a result of enhanced design, productivity improvements and material optimization.
Ceramic segment net sales for the quarter were $744 million, up 1% over last year as reported or 7% at a constant exchange rate. The segment's adjusted operating income grew 16% over the prior year, even with the impact of the declining euro and ruble; and the margin increased 150 basis points due to increased productivity as well as improved pricing and mix. In the U.S., the combined Dal-Tile and Marazzi organization is operating exceptionally well. The consolidated organization has enhanced the styling of our new products as we expand our offering of larger tile sizes, rectangles and planks, increasing our product mix and average selling prices. The company's new ceramic plant in Tennessee is on track to start up in the beginning of next year, with the building pad nearly complete. The company's ceramic sales in Mexico are growing rapidly from providing a complete product line of higher styled premium products and value priced products as well as expanding participation in the retail and new construction channels. Sales and margins in the company's European ceramic business grew by improving product mix, replacing inefficient manufacturing assets and reducing SG&A. Ceramic sales in Russia expanded significantly in local currency as consumers purchased ahead of anticipated price increases.
Laminate and Wood segment net sales for the quarter were $459 million, decreasing approximately 2% over last year as reported and increasing 4% at a constant exchange rate. Adjusted operating margin for the segment was approximately 12%, growing 30 basis points over the prior year. Laminate sales in Europe benefited from the rapid acceptance of the new Quick-Step® Impressive™ collection with enhanced surface texture and water repellency. Construction of the company's LVT plant in Belgium has been completed, and the start-up is focused on new product development. During the period, the company purchased a New Zealand flooring distributor, which expands the company's distribution model successfully executed in the U.K., Eastern Europe and Australia. The integration of Spano into the company's European board business is largely complete, creating improved mix, increased operational efficiencies and reduced SG&A costs. In the U.S., wood flooring sales grew, with engineered wood sales rising substantially, while laminate sales were impacted by lower mix, product changes and inventory reductions by our customers.
We anticipate stronger organic growth on a local basis in 2015, driven by improvements in the U.S. economy and the flooring market. In the U.S., rising consumer confidence supported by lower gasoline prices, low interest rates, increased home values and an improving job market should drive higher growth in our category. The U.S. dollar has recently strengthened considerably relative to the euro, ruble and other currencies and our translated results will be impacted. While we cannot affect the exchange rates, we are aggressively implementing productivity initiatives, SG&A reductions and other cost containment projects to minimize the impact. We will continue to invest in product innovation and operational improvements to drive our top line growth and margins. The first quarter of 2015 has four additional days, increasing sales 6%, and the fourth quarter will have four less days than in the same periods last year. Taking all of these factors into account, our guidance for first quarter earnings is $1.54 to $1.63 per share, excluding any restructuring charges and new acquisitions.
In January, we announced the continuation of our aggressive acquisition strategy with the purchase of the IVC Group, and we anticipate that the transaction will close early in the second quarter. Recently, we also signed an agreement to purchase a small Eastern European ceramic manufacturer, with the transaction expected to be completed in the second quarter. We have a strong foundation for future growth in all flooring categories in North America, Europe, Russia, Asia and Australia as we enhance our position as the world's largest flooring manufacturer.
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, Bigelow, Daltile, Durkan, Karastan, Lees, Marazzi, Kerama Marazzi, Mohawk, Pergo, Unilin and Quick-Step. 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, China, 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 in raw material prices and other input costs; 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; tax, product and other claims; litigation; and other risks identified in Mohawk's SEC reports and public announcements.
Conference call Friday, February 20, 2015 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 # 64529911. A replay will be available until Friday, March 6, 2015 by dialing 855-859-2056 for US/local calls and 404-537-3406 for International/Local calls and entering Conference ID # 64529911.
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MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES | ||||||||
|
Consolidated Statement of Operations |
Three Months Ended |
Twelve Months Ended | ||||||
|
(Amounts in thousands, except per share data) |
December 31, 2014 |
December 31, 2013 |
December 31, 2014 |
December 31, 2013 | ||||
|
Net sales |
$ 1,951,446 |
1,924,104 |
7,803,446 |
7,348,754 | ||||
|
Cost of sales |
1,409,843 |
1,411,307 |
5,649,254 |
5,427,945 | ||||
|
Gross profit |
541,603 |
512,797 |
2,154,192 |
1,920,809 | ||||
|
Selling, general and administrative expenses |
335,483 |
361,809 |
1,381,396 |
1,373,878 | ||||
|
Operating income |
206,120 |
150,988 |
772,796 |
546,931 | ||||
|
Interest expense |
20,623 |
22,148 |
98,207 |
92,246 | ||||
|
Other expense (income), net |
9,737 |
2,656 |
10,698 |
9,114 | ||||
|
Earnings from continuing operations before income taxes |
175,760 |
126,184 |
663,891 |
445,571 | ||||
|
Income tax expense |
28,680 |
15,420 |
131,637 |
78,385 | ||||
|
Earnings from continuing operations |
147,080 |
110,764 |
532,254 |
367,186 | ||||
|
Loss from discontinued operations, net of income tax benefit of $268 and $1,050, respectively |
- |
(15,981) |
- |
(17,895) | ||||
|
Net earnings including noncontrolling interest |
147,080 |
94,783 |
532,254 |
349,291 | ||||
|
Net earnings (loss) attributable to noncontrolling interest |
212 |
132 |
289 |
505 | ||||
|
Net earnings attributable to Mohawk Industries, Inc. |
$ 146,868 |
94,651 |
531,965 |
348,786 | ||||
|
Basic earnings per share attributable to Mohawk Industries, Inc. |
||||||||
|
Income from continuing operations |
$ 2.01 |
1.52 |
7.30 |
5.11 | ||||
|
Loss from discontinued operations, net of income taxes |
- |
(0.22) |
- |
(0.25) | ||||
|
Basic earnings per share attributable to Mohawk Industries, Inc. |
$ 2.01 |
1.30 |
7.30 |
4.86 | ||||
|
Weighted-average common shares outstanding - basic |
72,905 |
72,654 |
72,837 |
71,773 | ||||
|
Diluted earnings per share attributable to Mohawk Industries, Inc. |
||||||||
|
Income from continuing operations |
$ 2.00 |
1.51 |
7.25 |
5.07 | ||||
|
Loss from discontinued operations, net of income taxes |
- |
(0.22) |
- |
(0.25) | ||||
|
Diluted earnings per share attributable to Mohawk Industries, Inc. |
$ 2.00 |
1.29 |
7.25 |
4.82 | ||||
|
Weighted-average common shares outstanding - diluted |
73,452 |
73,214 |
73,363 |
72,301 | ||||
|
Other Financial Information |
||||||||
|
(Amounts in thousands) |
||||||||
|
Net cash provided by (used in) operating activities |
$ 338,765 |
198,190 |
662,188 |
525,163 | ||||
|
Depreciation and amortization |
$ 95,665 |
86,329 |
345,570 |
308,871 | ||||
|
Capital expenditures |
$ 170,224 |
111,027 |
561,804 |
366,550 | ||||
|
Consolidated Balance Sheet Data |
||||||||
|
(Amounts in thousands) |
||||||||
|
December 31, 2014 |
December 31, 2013 | |||||||
|
ASSETS |
||||||||
|
Current assets: |
||||||||
|
Cash and cash equivalents |
$ 97,877 |
54,066 | ||||||
|
Receivables, net |
1,081,963 |
1,062,875 | ||||||
|
Inventories |
1,543,313 |
1,572,325 | ||||||
|
Prepaid expenses and other current assets |
257,333 |
248,918 | ||||||
|
Deferred income taxes |
151,784 |
147,534 | ||||||
|
Total current assets |
3,132,270 |
3,085,718 | ||||||
|
Property, plant and equipment, net |
2,703,210 |
2,701,743 | ||||||
|
Goodwill |
1,604,352 |
1,736,092 | ||||||
|
Intangible assets, net |
702,009 |
811,602 | ||||||
|
Deferred income taxes and other non-current assets |
143,703 |
159,022 | ||||||
|
Total assets |
$ 8,285,544 |
8,494,177 | ||||||
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
||||||||
|
Current liabilities: |
||||||||
|
Current portion of long-term debt and commercial paper |
$ 851,305 |
127,218 | ||||||
|
Accounts payable and accrued expenses |
1,104,509 |
1,193,593 | ||||||
|
Total current liabilities |
1,955,814 |
1,320,811 | ||||||
|
Long-term debt, less current portion |
1,402,135 |
2,132,790 | ||||||
|
Deferred income taxes and other long-term liabilities |
504,782 |
570,270 | ||||||
|
Total liabilities |
3,862,731 |
4,023,871 | ||||||
|
Total stockholders' equity |
4,422,813 |
4,470,306 | ||||||
|
Total liabilities and stockholders' equity |
$ 8,285,544 |
8,494,177 | ||||||
|
Segment Information |
Three Months Ended |
As of or for the Twelve Months Ended | ||||||
|
(Amounts in thousands) |
December 31, 2014 |
December 31, 2013 |
December 31, 2014 |
December 31, 2013 | ||||
|
Net sales: |
||||||||
|
Carpet |
$ 779,865 |
747,143 |
3,013,948 |
2,986,096 | ||||
|
Ceramic |
743,619 |
738,004 |
3,015,279 |
2,677,058 | ||||
|
Laminate and Wood |
458,728 |
466,082 |
1,890,567 |
1,792,260 | ||||
|
Intersegment sales |
(30,766) |
(27,125) |
(116,348) |
(106,660) | ||||
|
Consolidated net sales |
$ 1,951,446 |
1,924,104 |
7,803,446 |
7,348,754 | ||||
|
Operating income (loss): |
||||||||
|
Carpet |
$ 84,759 |
60,087 |
255,938 |
209,023 | ||||
|
Ceramic |
82,793 |
57,637 |
351,113 |
209,825 | ||||
|
Laminate and Wood |
45,004 |
40,290 |
194,734 |
159,365 | ||||
|
Corporate and eliminations |
(6,436) |
(7,026) |
(28,989) |
(31,282) | ||||
|
Consolidated operating income |
$ 206,120 |
150,988 |
772,796 |
546,931 | ||||
|
Assets: |
||||||||
|
Carpet |
$ 1,986,081 |
1,786,085 | ||||||
|
Ceramic |
3,542,594 |
3,787,785 | ||||||
|
Laminate and Wood |
2,542,566 |
2,716,759 | ||||||
|
Corporate and eliminations |
214,303 |
203,548 | ||||||
|
Consolidated assets |
$ 8,285,544 |
8,494,177 | ||||||
|
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 |
Twelve Months Ended | |||||||||||
|
December 31, 2014 |
December 31, 2013 |
December 31, 2014 |
December 31, 2013 | |||||||||
|
Net earnings attributable to Mohawk Industries, Inc. |
$ 146,868 |
94,651 |
531,965 |
348,786 | ||||||||
|
Adjusting items: |
||||||||||||
|
Restructuring, acquisition, integration-related costs and disposal of subsidiary |
26,649 |
37,812 |
63,556 |
113,420 | ||||||||
|
Acquisitions purchase accounting (inventory step-up) |
- |
- |
- |
31,041 | ||||||||
|
Discontinued operations |
- |
16,249 |
- |
18,945 | ||||||||
|
Legal reserve |
- |
- |
10,000 |
- | ||||||||
|
Bond redemption |
3,472 |
- |
18,922 |
- | ||||||||
|
Deferred loan costs |
- |
- |
1,080 |
490 | ||||||||
|
Interest on 3.85% senior notes |
- |
- |
- |
3,559 | ||||||||
|
Income taxes |
(10,444) |
(17,621) |
(27,856) |
(42,841) | ||||||||
|
Adjusted net earnings attributable to Mohawk Industries, Inc. |
$ 166,545 |
131,091 |
597,667 |
473,400 | ||||||||
|
Adjusted diluted earnings per share attributable to Mohawk Industries, Inc. |
2.27 |
1.79 |
8.15 |
6.55 | ||||||||
|
Weighted-average common shares outstanding - diluted |
73,452 |
73,214 |
73,363 |
72,301 | ||||||||
|
Reconciliation of Adjusted Diluted Earnings Per Share on a Constant Exchange Rate |
||||||||||||
|
Three Months Ended |
||||||||||||
|
December 31, 2014 |
||||||||||||
|
Adjusted diluted earnings per share attributable to Mohawk Industries, Inc. |
$ 2.27 |
|||||||||||
|
Adjustment to constant exchange rate |
0.09 |
|||||||||||
|
Adjusted diluted earnings per share attributable to Mohawk Industries, Inc. on a constant exchange rate |
$ 2.36 |
|||||||||||
|
Reconciliation of Total Debt to Net Debt |
||||||||||||
|
(Amounts in thousands) |
||||||||||||
|
December 31, 2014 |
||||||||||||
|
Current portion of long-term debt and commercial paper |
$ 851,305 |
|||||||||||
|
Long-term debt, less current portion |
1,402,135 |
|||||||||||
|
Less: Cash and cash equivalents |
97,877 |
|||||||||||
|
Net Debt |
$ 2,155,563 |
|||||||||||
|
Reconciliation of Operating Income to Adjusted EBITDA |
||||||||||||
|
(Amounts in thousands) |
Trailing Twelve | |||||||||||
|
Three Months Ended |
Months Ended | |||||||||||
|
March 29, 2014 |
June 28, 2014 |
September 27, 2014 |
December 31, 2014 |
December 31, 2014 | ||||||||
|
Operating income |
130,735 |
222,248 |
213,693 |
206,120 |
772,796 | |||||||
|
Other (expense) income |
(4,890) |
1,555 |
2,374 |
(9,737) |
(10,698) | |||||||
|
Net (earnings) loss attributable to non-controlling interest |
28 |
(111) |
6 |
(212) |
(289) | |||||||
|
Depreciation and amortization |
80,984 |
83,754 |
85,167 |
95,665 |
345,570 | |||||||
|
EBITDA |
206,857 |
307,446 |
301,240 |
291,836 |
1,107,379 | |||||||
|
Restructuring, acquisition and integration-related costs |
11,725 |
11,169 |
14,013 |
26,649 |
63,556 | |||||||
|
Legal reserve |
- |
- |
10,000 |
- |
10,000 | |||||||
|
Adjusted EBITDA |
218,582 |
318,615 |
325,253 |
318,485 |
1,180,935 | |||||||
|
Net Debt to Adjusted EBITDA |
1.8 | |||||||||||
|
Reconciliation of Net Sales to Net Sales on a Constant Exchange Rate |
||||||||||||
|
(Amounts in thousands) |
||||||||||||
|
Three Months Ended |
Twelve Months Ended |
|||||||||||
|
December 31, 2014 |
December 31, 2013 |
December 31, 2014 |
December 31, 2013 |
|||||||||
|
Net sales |
$ 1,951,446 |
1,924,104 |
7,803,446 |
7,348,754 |
||||||||
|
Adjustment to net sales on a constant exchange rate |
72,152 |
- |
56,052 |
- |
||||||||
|
Net sales on a constant exchange rate |
$ 2,023,598 |
1,924,104 |
7,859,498 |
7,348,754 |
||||||||
|
Reconciliation of Segment Net Sales to Segment Net Sales on a Constant Exchange Rate |
||||||||||||
|
(Amounts in thousands) |
||||||||||||
|
Three Months Ended |
||||||||||||
|
Ceramic |
December 31, 2014 |
December 31, 2013 |
||||||||||
|
Net sales |
$ 743,619 |
738,004 |
||||||||||
|
Adjustment to segment net sales on a constant exchange rate |
44,742 |
- |
||||||||||
|
Segment net sales on a constant exchange rate |
$ 788,361 |
738,004 |
||||||||||
|
Reconciliation of Segment Net Sales to Segment Net Sales on a Constant Exchange Rate |
||||||||||||
|
(Amounts in thousands) |
||||||||||||
|
Three Months Ended |
||||||||||||
|
Laminate and Wood |
December 31, 2014 |
December 31, 2013 |
||||||||||
|
Net sales |
$ 458,728 |
466,082 |
||||||||||
|
Adjustment to segment net sales on a constant exchange rate |
27,411 |
- |
||||||||||
|
Segment net sales on a constant exchange rate |
$ 486,139 |
466,082 |
||||||||||
|
Reconciliation of Gross Profit to Adjusted Gross Profit |
||||||||||||
|
(Amounts in thousands) |
||||||||||||
|
Three Months Ended |
Twelve Months Ended |
|||||||||||
|
December 31, 2014 |
December 31, 2013 |
December 31, 2014 |
December 31, 2013 |
|||||||||
|
Gross Profit |
$ 541,603 |
512,797 |
2,154,192 |
1,920,809 |
||||||||
|
Adjustments to gross profit: |
||||||||||||
|
Restructuring and integration-related costs |
11,568 |
16,707 |
31,222 |
49,151 |
||||||||
|
Acquisitions purchase accounting (inventory step-up) |
- |
- |
- |
31,041 |
||||||||
|
Adjusted gross profit |
$ 553,171 |
529,504 |
2,185,414 |
2,001,001 |
||||||||
|
Adjusted gross profit as a percent of net sales |
28.3% |
27.5% |
28.0% |
27.2% |
||||||||
|
Reconciliation of Selling, General and Administrative Expenses to Adjusted Selling, General and Administrative Expenses |
||||||||||||
|
(Amounts in thousands) |
||||||||||||
|
Three Months Ended |
||||||||||||
|
December 31, 2014 |
December 31, 2013 |
|||||||||||
|
Selling, general and administrative expenses |
$ 335,483 |
361,809 |
||||||||||
|
Adjustments to selling, general and administrative expenses: |
||||||||||||
|
Restructuring, acquisition and integration-related costs |
(3,127) |
(19,644) |
||||||||||
|
Adjusted selling, general and administrative expenses |
$ 332,356 |
342,165 |
||||||||||
|
Adjusted selling, general and administrative expenses as a percent of net sales |
17.0% |
17.8% |
||||||||||
|
Reconciliation of Operating Income to Adjusted Operating Income |
||||||||||||
|
(Amounts in thousands) |
||||||||||||
|
Three Months Ended |
Twelve Months Ended |
|||||||||||
|
December 31, 2014 |
December 31, 2013 |
December 31, 2014 |
December 31, 2013 |
|||||||||
|
Operating income |
$ 206,120 |
150,988 |
772,796 |
546,931 |
||||||||
|
Adjustments to operating income: |
||||||||||||
|
Restructuring, acquisition and integration-related costs |
14,695 |
36,351 |
63,556 |
111,939 |
||||||||
|
Legal reserve |
- |
- |
10,000 |
- |
||||||||
|
Acquisitions purchase accounting (inventory step-up) |
- |
- |
- |
31,041 |
||||||||
|
Adjusted operating income |
$ 220,815 |
187,339 |
846,352 |
689,911 |
||||||||
|
Adjusted operating income as a percent of net sales |
11.3% |
9.7% |
10.8% |
9.4% |
||||||||
|
Reconciliation of Adjusted Operating Income on a Constant Exchange Rate |
||||||||||||
|
(Amounts in thousands) |
||||||||||||
|
Three Months Ended |
||||||||||||
|
December 31, 2014 |
December 31, 2013 |
|||||||||||
|
Operating income |
$ 206,120 |
150,988 |
||||||||||
|
Adjustments to operating income |
14,695 |
36,351 |
||||||||||
|
Adjustments to operating income on a constant exchange rate |
8,050 |
- |
||||||||||
|
Adjusted operating income on constant exchange rate |
$ 228,865 |
187,339 |
||||||||||
|
Adjusted operating income as a percent of net sales |
11.3% |
9.7% |
||||||||||
|
Reconciliation of Segment Operating Income to Adjusted Segment Operating Income |
||||||||||||
|
(Amounts in thousands) |
||||||||||||
|
Three Months Ended |
Twelve Months Ended |
|||||||||||
|
Carpet |
December 31, 2014 |
December 31, 2013 |
December 31, 2014 |
December 31, 2013 |
||||||||
|
Operating income |
$ 84,759 |
60,087 |
255,938 |
209,023 |
||||||||
|
Adjustment to segment operating income: |
||||||||||||
|
Restructuring, acquisition and integration-related costs |
1,999 |
6,005 |
1,999 |
13,603 |
||||||||
|
Legal reserve |
- |
- |
10,000 |
- |
||||||||
|
Adjusted segment operating income |
$ 86,758 |
66,092 |
267,937 |
222,626 |
||||||||
|
Adjusted operating income as a percent of net sales |
11.1% |
8.8% |
8.9% |
7.5% |
||||||||
|
Reconciliation of Segment Operating Income to Adjusted Segment Operating Income |
||||||||||||
|
(Amounts in thousands) |
||||||||||||
|
Three Months Ended |
Twelve Months Ended |
|||||||||||
|
Ceramic |
December 31, 2014 |
December 31, 2013 |
December 31, 2014 |
December 31, 2013 |
||||||||
|
Operating income |
$ 82,793 |
57,637 |
351,113 |
209,825 |
||||||||
|
Adjustments to segment operating income: |
||||||||||||
|
Restructuring, acquisition and integration-related costs |
2,905 |
15,982 |
9,330 |
42,876 |
||||||||
|
Acquisitions purchase accounting (inventory step-up) |
- |
- |
- |
31,041 |
||||||||
|
Adjusted segment operating income |
$ 85,698 |
73,619 |
360,443 |
283,742 |
||||||||
|
Adjusted operating income as a percent of net sales |
11.5% |
10.0% |
12.0% |
10.6% |
||||||||
|
Reconciliation of Segment Operating Income to Adjusted Segment Operating Income on a Constant Exchange Rate |
||||||||||||
|
(Amounts in thousands) |
||||||||||||
|
Three Months Ended |
||||||||||||
|
Ceramic |
December 31, 2014 |
December 31, 2013 |
||||||||||
|
Operating income |
$ 82,793 |
57,637 |
||||||||||
|
Adjustments to operating income |
2,905 |
15,982 |
||||||||||
|
Adjustments to operating income on a constant exchange rate |
4,493 |
- |
||||||||||
|
Adjusted operating income on constant exchange rate |
$ 90,191 |
73,619 |
||||||||||
|
Adjusted operating income as a percent of net sales |
11.4% |
10.0% |
||||||||||
|
Reconciliation of Segment Operating Income to Adjusted Segment Operating Income |
||||||||||||
|
(Amounts in thousands) |
||||||||||||
|
Three Months Ended |
Twelve Months Ended |
|||||||||||
|
Laminate and Wood |
December 31, 2014 |
December 31, 2013 |
December 31, 2014 |
December 31, 2013 |
||||||||
|
Operating income |
$ 45,004 |
40,290 |
194,734 |
159,365 |
||||||||
|
Adjustment to segment operating income: |
||||||||||||
|
Restructuring, acquisition and integration-related costs |
9,424 |
13,852 |
38,788 |
54,235 |
||||||||
|
Adjusted segment operating income |
$ 54,428 |
54,142 |
233,522 |
213,600 |
||||||||
|
Adjusted operating income as a percent of net sales |
11.9% |
11.6% |
12.4% |
11.9% |
||||||||
|
Reconciliation of Segment Operating Income to Adjusted Segment Operating Income on a Constant Exchange Rate |
||||||||||||
|
(Amounts in thousands) |
||||||||||||
|
Three Months Ended |
||||||||||||
|
Laminate and Wood |
December 31, 2014 |
December 31, 2013 |
||||||||||
|
Operating income |
$ 45,004 |
40,290 |
||||||||||
|
Adjustments to operating income |
9,424 |
13,852 |
||||||||||
|
Adjustments to operating income on a constant exchange rate |
3,557 |
- |
||||||||||
|
Adjusted operating income on constant exchange rate |
$ 57,985 |
54,142 |
||||||||||
|
Adjusted operating income as a percent of net sales |
11.9% |
11.6% |
||||||||||
|
Reconciliation of Earnings from Continuing Operations Before Income Taxes to Adjusted Earnings from Continuing Operations Before Income Taxes |
||||||||||||
|
(Amounts in thousands) |
||||||||||||
|
Three Months Ended |
||||||||||||
|
December 31, 2014 |
December 31, 2013 |
|||||||||||
|
Earnings from continuing operations before income taxes |
$ 175,760 |
126,184 |
||||||||||
|
Adjustments to earnings from continuing operations before income taxes: |
||||||||||||
|
Restructuring, acquisition, integration-related costs and disposal of subsidiary |
26,649 |
37,812 |
||||||||||
|
Acquisitions purchase accounting (inventory step-up) |
- |
- |
||||||||||
|
Legal reserve |
- |
- |
||||||||||
|
Bond redemption |
3,472 |
- |
||||||||||
|
Deferred loan costs |
- |
- |
||||||||||
|
Interest on 3.85% senior notes |
- |
- |
||||||||||
|
Adjusted earnings before income taxes |
$ 205,881 |
163,996 |
||||||||||
|
Reconciliation of Income Tax Expense to Adjusted Income Tax Expense |
||||||||||||
|
(Amounts in thousands) |
||||||||||||
|
Three Months Ended |
||||||||||||
|
December 31, 2014 |
December 31, 2013 |
|||||||||||
|
Income tax expense |
$ 28,680 |
15,420 |
||||||||||
|
Income tax effect of adjusting items |
10,444 |
17,353 |
||||||||||
|
Adjusted income tax expense |
$ 39,124 |
32,773 |
||||||||||
|
Adjusted income tax rate |
19% |
20% |
||||||||||
|
Proforma Net Sales and Operating Income Adjusted by FX |
||||||||||||
|
(Amounts in thousands) |
Twelve Months Ended |
|||||||||||
|
December 31, 2014 |
||||||||||||
|
Net Sales |
Operating Income |
|||||||||||
|
Net Sales and Operating Income as reported |
$ 7,803,446 |
772,796 |
||||||||||
|
FX adjustments using average rates of Euro/USD: 1.14 and Ruble/USD: 61.0 |
(392,838) |
(56,436) |
||||||||||
|
Proforma Net Sales and Operating Income Adjusted by FX |
$ 7,410,608 |
716,360 |
||||||||||
|
The Company believes it is useful for itself and investors to review, as applicable, both GAAP and the above non-GAAP measures in order to assess the performance of the Company's business for planning and forecasting in subsequent periods. In particular, the Company believes excluding the impact of restructuring, acquisition and integration-related costs is useful because it allows investors to evaluate our performance for different periods on a more comparable basis. | ||||||||||||
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