Mohawk Industries, Inc. Announces First Quarter Earnings

By Mohawk Industries Inc., PRNE
Wednesday, May 4, 2011

CALHOUN, Georgia, May 5, 2011 - Mohawk Industries, Inc. (NYSE: MHK) today announced 2011 first quarter
net earnings of $23 million and diluted earnings per share (EPS) of $0.34.
Excluding restructuring charges, 2011 first quarter net earnings were $29
million
and EPS of $0.42. For the first quarter of 2010, the net earnings
were $21 million and EPS was $0.30. Excluding restructuring charges, 2010
first quarter net earnings and EPS were $24 million and $0.35 per share. Net
sales for the first quarter of 2011 were $1.3 billion which was flat versus
2010. Our cash and net debt to adjusted EBITDA ratio stand at $256 million
and 2.2 respectively, providing flexibility to pursue strategic
opportunities.

Commenting on the first quarter results, Jeffrey S. Lorberbaum, Chairman
and CEO stated, "We grew our operating margin to 4.7% excluding restructuring
charges, an improvement of approximately 40 basis points over the first
quarter last year by continuing to drive cost reductions, manufacturing
improvements and efficiency gains throughout the enterprise. Sales reported
during the period were flat with last year with the outlook strengthening for
the balance of the year. In the U.S., both remodeling and home sales are
expected to improve over last year, and non-residential investment is
estimated to increase over 8% in 2011."

Our Mohawk segment net sales declined 3.5% with commercial seeing
improvement and the residential category still lagging. The residential order
trends turned positive at the end of the first quarter and continued into
April. The commercial business continues its recovery with modular tile
products growing significantly. The hospitality channel is rebounding after
several years of reduced capital spending. We expect continued improvement in
our business from our new product introductions, additional customer
commitments, price increases to cover raw materials and operational
improvements. We announced two carpet price increases to offset the dramatic
raw material inflation with the first increase in February followed by the
second increase in April. Operational enhancements to optimize productivity,
material and service are being executed and will improve our cost position
this year. We are completing the consolidation of a carpet facility in South
Georgia
and relocating the production to our other manufacturing plants. Our
many Greenworks initiatives continue to increase the recycled content
utilized in our products and processes furthering our sustainable
manufacturing commitments while lowering our costs.

Our Dal-Tile segment net sales increased approximately 1% versus last
year. The sales trends improved during the period with commercial
outperforming residential. We continued the expansion of our Reveal Imaging
technology receiving multiple product awards and increased our position in
the home center channel. To recover the rising freight costs, we have
increased prices on our products and transportation. Cost reductions continue
from new investments in technology, lean manufacturing, material innovations
and improvements in the supply chain. We are implementing our ceramic
strategy in Mexico where the market is growing 5%. We are expanding our sales
organization, product offering and customer base to support a new facility in
Mexico which should be operational in mid-2012. Our Chinese joint venture is
investing to gain market share, increase product mix, improve efficiencies
and strengthen management systems. We are building a strong platform to be
positioned as a leader in the market.

Our Unilin net sales increased approximately 7% both as reported and on a
constant exchange rate. Sales of most of our European products were positive
while U.S. markets remain difficult but are showing improvement. Our margins
were under pressure from escalating raw material costs which are ahead of our
price increases. Price increases were implemented in European flooring,
roofing and boards to offset material inflation and additional increases for
some products have been announced in the second quarter. We are continuing to
expand sales in home centers across Europe with Quick Step products
positioned as a premium offering. The U.S. flooring business improved as we
proceeded through the first quarter and we strengthened our position in the
home center and specialized hard surface channels. We improved our U.S. wood
manufacturing costs and enhanced the sales mix with higher value products and
additional performance features.

After the seasonally slow first quarter, we believe the industry recovery
will continue the balance of the year. Commercial renovation is improving as
companies begin to reinvest. We anticipate pent-up demand in the residential
remodeling market and improving home sales will positively impact results
this year. Price and volume increases, along with cost reductions will
enhance profitability. With these factors, our second quarter guidance for
earnings is $0.87 to $0.97 per share, excluding any restructuring charges.

We have improved our organization's ability to drive innovation in
product, processes and costs. We have managed through a challenging period
and significantly redesigned our businesses to maximize our long term
results. Our investments in new assets, geographic expansion and systems will
enhance our core businesses and create new growth opportunities.

Mohawk is a leading supplier of flooring for both residential and
commercial applications. Mohawk offers a complete selection of carpet,
ceramic tile, laminate, wood, stone, vinyl, and rugs. These products are
marketed under the premier brands in the industry, which include Mohawk,
Karastan, Lees, Bigelow, Dal-Tile, American Olean, Unilin and Quick Step.
Mohawk's unique merchandising and marketing assist our customers in creating
the consumers' dream. Mohawk provides a premium level of service with its own
trucking fleet and local distribution. Mohawk's operational international
presence includes Mexico, Europe, China, Russia and Malaysia.

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; raw material and energy costs; timing and level of capital
expenditures; integration of acquisitions; rationalization of operations;
claims; litigation and other risks identified in Mohawk's SEC reports and
public announcements.

There will be a conference call Friday, May 6, 2011 at 11:00 AM Eastern
Time
.

The telephone number to call is 1-800-603-9255 for US/Canada and
+1-706-634-2294 for International/Local. Conference ID # 57677152. A
conference call replay will also be available until May 20, 2011 by dialing
800-642-1687 for US/local calls and +1-706-645-9291 for International/Local
calls and entering Conference ID # 57677152.

    MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

    Consolidated Statement of Operations             Three Months Ended
                                                     ------------------
    (Amounts in thousands, except                 April 2,          April 3,
     per share data)                                 2011              2010
                                                  -------           -------

    Net sales                                  $1,343,595         1,347,236
    Cost of sales                               1,002,003         1,005,990
    -----------------------------               ---------         ---------
        Gross profit                              341,592           341,246
    Selling, general and
     administrative expenses                      285,508           287,625
    ------------------------                      -------           -------
    Operating income                               56,084            53,621
    Interest expense                               26,595            33,908
    Other expense (income), net                       (15)           (4,531)
    ---------------------------                       ---            ------
        Earnings before income taxes               29,504            24,244
    Income tax expense                              4,966             2,974
    ------------------                              -----             -----
    Net earnings                                   24,538            21,270
    Net earnings attributable to
     noncontrolling interest                       (1,096)             (732)
        Net earnings attributable to
         Mohawk Industries, Inc.                  $23,442            20,538
        ----------------------------              -------            ------
    Basic earnings per share
     attributable to Mohawk
     Industries, Inc.                               $0.34              0.30
    ------------------------                        -----              ----
    Weighted-average common
     shares outstanding - basic                    68,674            68,523
    ---------------------------                    ------            ------
    Diluted earnings per share
     attributable to Mohawk
     Industries Inc.                                $0.34              0.30
    --------------------------                      -----              ----
    Weighted-average common
     shares outstanding - diluted                  68,904            68,730
    -----------------------------                  ------            ------

    Other Financial Information
    (Amounts in thousands)
    Net cash used in operating
     activities                                   $67,413            46,192
    --------------------------                    -------            ------
    Depreciation and amortization                 $74,253            76,798
    -----------------------------                 -------            ------
    Capital expenditures                          $52,811            23,309
    --------------------                          -------            ------

    Consolidated Balance Sheet Data
    (Amounts in thousands)
                                                  April 2,          April 3,
                                                     2011              2010
                                                  -------           -------
    ASSETS
    Current assets:
        Cash and cash equivalents                $256,231           452,335
        Receivables, net                          754,826           788,124
        Inventories                             1,075,613           932,785
        Prepaid expenses                           97,846           109,968
        Deferred income taxes and
         other current assets                     155,159           160,246
        -------------------------                 -------           -------
            Total current assets                2,339,675         2,443,458
    Property, plant and equipment, net          1,715,895         1,719,051
    Goodwill                                    1,406,731         1,377,518
    Intangible assets, net                        689,703           736,353
    Deferred income taxes and
     other non-current assets                     114,229            42,520
    -------------------------                     -------            ------
                                               $6,266,233         6,318,900
                                               ----------         ---------
    LIABILITIES AND EQUITY
    Current liabilities:
      Current portion of long-term debt           $52,706           551,426
      Accounts payable and accrued
       expenses                                   739,768           859,690
      ----------------------------                -------           -------
            Total current liabilities             792,474         1,411,116
    Long-term debt, less current
     portion                                    1,577,188         1,303,437
    Deferred income taxes and
     other long-term liabilities                  449,984           452,858
    ----------------------------                  -------           -------
            Total liabilities                   2,819,646         3,167,411
            -----------------                   ---------         ---------
    Noncontrolling interest                        33,255            29,866
    -----------------------
    Total stockholders' equity                  3,413,332         3,121,623
    --------------------------                  ---------         ---------
                                               $6,266,233         6,318,900
                                               ----------         ---------

                                                    As of or for the Three
    Segment Information                                  Months Ended
                                                   -----------------------
                                                  April 2,          April 3,
    (Amounts in thousands)                           2011              2010
                                                  -------          --------
    Net sales:
        Mohawk                                   $691,165           716,583
        Dal-Tile                                  344,415           341,396
        Unilin                                    325,832           305,880
        Intersegment sales                        (17,817)          (16,623)

            Consolidated net sales             $1,343,595         1,347,236
            ----------------------             ----------         ---------

    Operating income:
        Mohawk                                    $17,040            16,628
        Dal-Tile                                   17,700            15,395
        Unilin                                     26,250            26,458
        Corporate and eliminations                 (4,906)           (4,860)

            Consolidated operating income         $56,084            53,621
            -----------------------------         -------            ------

    Assets:
        Mohawk                                 $1,749,625         1,673,264
        Dal-Tile                                1,674,408         1,568,605
        Unilin                                  2,654,268         2,525,731
        Corporate and eliminations                187,932           551,300
                                                                    -------
            Consolidated assets                $6,266,233         6,318,900
            -------------------                ----------         ---------

    Reconciliation of Net Earnings to Adjusted Net Earnings and Adjusted
    Diluted Earnings Per Share
    (Amounts in thousands, except per share data)

                                                Three Months Ended
                                                ------------------
                                       April 2, 2011        April 3, 2010
                                       -------------        -------------
    Net earnings
     attributable to
     Mohawk Industries,
     Inc.                                   $23,442               20,538
    Unusual items:
      Business
       restructurings                         6,813                4,004
      Income taxes                           (1,018)                (469)
      ------------                           ------                 ----
        Adjusted net earnings               $29,237               24,073
    ---------------------                    -------              ------

    Adjusted diluted
     earnings per share                       $0.42                 0.35
    Weighted-average
     common shares
     outstanding -
     diluted                                 68,904               68,730
    Reconciliation of Total Debt to Net Debt

                                                 As of
    (Amounts in thousands)                   April 2, 2011
    ----------------------                   -------------
    Current portion of long-
     term debt                                    $52,706
    Long-term debt, less
     current portion                            1,577,188
    Less: Cash and cash
     equivalents                                  256,231
    -------------------                           -------
      Net Debt                                 $1,373,663
      --------                                 ----------

    Reconciliation of Operating Income to Adjusted EBITDA
    (Amounts in thousands)

                                         Three Months Ended
                                         ------------------

                                 July 3, 2010       October 2, 2010
                                 ------------       ---------------
    Operating income                 $89,726              85,182
        Other income (expense)          (544)             (1,124)
        U.S. customs refund                -               5,765
          Net earnings
           attributable to
           noncontrolling
           interest                     (884)             (1,170)
        Depreciation and
         amortization                 72,497              72,956
        ----------------              ------              ------
           EBITDA                    160,795             161,609
        Business restructurings        4,929               3,330
     Adjusted EBITDA                $165,724             164,939
     ---------------                --------             -------

      Net Debt to Adjusted
       EBITDA
      --------------------

                                        Three Months Ended
                                        ------------------
                                 December 31,          April 2,
                                     2010               2011
                                -------------         ---------
    Operating income                 85,640             56,084
        Other income (expense)        1,037                (15)
        U.S. customs refund           1,965                  -
          Net earnings
           attributable to
           noncontrolling
           interest                  (1,678)            (1,096)
        Depreciation and
         amortization                 74,522            74,253
        ----------------              ------            ------
           EBITDA                    161,486           129,226
        Business restructurings            -             6,813
                                         ---             -----
     Adjusted EBITDA                 161,486           136,039
     ---------------                 -------           -------

      Net Debt to Adjusted
       EBITDA
      --------------------

                                        Trailing Twelve
                                          Months Ended
                                         April 2, 2011
                                         -------------
    Operating income                          316,632
        Other income (expense)                   (646)
        U.S. customs refund                     7,730
          Net earnings
           attributable to
           noncontrolling
           interest                            (4,828)
        Depreciation and
         amortization                         294,228
        ----------------                      -------
           EBITDA                             613,116
        Business restructurings                15,072
                                               ------
     Adjusted EBITDA                          628,188
     ---------------                          -------

      Net Debt to Adjusted
       EBITDA                                     2.2
      --------------------                        ---
    Reconciliation of Segment Net Sales to Adjusted Segment Net Sales
    (Amounts in thousands)

                                            Three Months Ended
                                            ------------------
    Unilin segment                 April 2, 2011       April 3, 2010
    --------------                 -------------       -------------
    Net sales                           $325,832             305,880
    Adjustments to net
     sales:
      Exchange rate                        2,319                   -
        Adjusted net sales              $328,151             305,880
        ------------------              --------             -------

    Reconciliation of Gross Profit to Adjusted Gross Profit
    (Amounts in thousands)

                                           Three Months Ended
                                           ------------------
                                  April 2, 2011         April 3, 2010
                                  -------------         -------------
    Gross profit                       $341,592              341,246
    Adjustments to gross
     profit:
      Business
       restructurings                     6,347                3,857
      Adjusted gross profit            $347,939              345,103
      ---------------------            --------              -------
       Adjusted gross profit as
        a percent of net sales             25.9%                25.6%

    Reconciliation of Operating Income to Adjusted Operating Income
    (Amounts in thousands)

                                           Three Months Ended
                                           ------------------
                                  April 2, 2011         April 3, 2010
                                  -------------         -------------
    Operating income                    $56,084                53,621
    Adjustments to operating
     income:
      Business
       restructurings                     6,813                 4,004
      Adjusted operating
       income                           $62,897                57,625
      ------------------                -------                ------
       Adjusted operating income
        as a percent of net
        sales                               4.7%                  4.3%

                                           Three Months Ended
                                           ------------------
    Mohawk segment                April 2, 2011         April 3, 2010
    --------------                -------------         -------------
    Operating income                    $17,040                16,628
    Adjustments to operating
     income:
      Business
       restructurings                     6,813                 3,229
      Adjusted operating
       income                           $23,853                19,857
      ------------------                -------                ------
       Adjusted operating income
        as a percent of net
        sales                               3.5%                  2.8%

                                           Three Months Ended
                                           ------------------
    Unilin segment                April 2, 2011         April 3, 2010
    --------------                -------------         -------------
    Operating income                    $26,250                26,458
    Adjustments to operating
     income:
      Business
       restructurings                         -                   775
      Adjusted operating
       income                           $26,250                27,233
      ------------------                -------                ------
       Adjusted operating income
        as a percent of net
        sales                               8.1%                  8.9%

    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.

Frank H. Boykin, Chief Financial Officer, +1-706-624-2695

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