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News Releases

Mohawk Industries Reports Q2 Results

July 29, 2021 at 4:10 PM EDT

CALHOUN, Ga., July 29, 2021 (GLOBE NEWSWIRE) -- Mohawk Industries, Inc. (NYSE: MHK) today announced 2021 second quarter net earnings of $336 million and diluted earnings per share (EPS) of $4.82. Adjusted net earnings were $310 million, and EPS was $4.45, excluding restructuring, acquisition and other charges. Net sales for the second quarter of 2021 were $3.0 billion, up 44% as reported and 38% on a constant currency and days basis. For the second quarter of 2020, net sales were $2.0 billion, net loss was $48 million and diluted loss per share was $0.68, adjusted net earnings were $26 million, and EPS was $0.37, excluding restructuring, acquisition and other charges.

For the six months ending July 3, 2021, net earnings and EPS were $573 million and $8.18, respectively. Net earnings excluding restructuring, acquisition and other charges were $556 million and EPS was $7.94. For the 2021 six-month period, net sales were $5.6 billion, an increase of 30% versus prior year as reported or 23% on a constant currency and days basis. For the six-month period ending June 27, 2020, net sales were $4.3 billion, net earnings were $62 million and EPS was $0.87; excluding restructuring, acquisition and other charges, net earnings and EPS were $146 million and $2.04, respectively.

Commenting on Mohawk Industries’ second quarter performance, Jeffrey S. Lorberbaum, Chairman and CEO, stated, “In the quarter, we generated the highest quarterly sales of any period in our company’s history. Our revenues increased significantly over last year, when the pandemic interrupted the global economy. Our second quarter results were significantly stronger than we had anticipated across all our businesses with sales building on the momentum from our first period. In the quarter, our EPS was the highest on record for any quarter and our operating margin expanded to its highest level in the last four years as we leveraged our operational and SG&A expenses. The actions we have taken to simplify our product offering, enhance our productivity and restructure our costs are benefiting our results. We have delivered almost $95 million of the anticipated $100 to $110 million in savings from our restructuring initiatives. Across the enterprise, we continue to respond to rising material, energy and transportation costs by increasing product prices and optimizing manufacturing and logistics.

“During the quarter, most of our manufacturing ran near capacity or were limited by material supply and labor availability. Raw material constraints in many of our operations led to unplanned production shut downs during the period. Overall, we successfully managed these interruptions that impeded our normal operations as well as regional manufacturing and customer closings related to Covid regulations in local areas. Our inventory levels increased slightly in the period, primarily reflecting higher material costs. Rising freight costs and limited shipping capacity impacted our material costs, availability of imported products, local shipments to customers and international exports. Presently, we do not anticipate near term abatement of these constraints.

“All of our markets continue to show strength with robust housing sales and remodeling investments across the world. Commercial projects are increasing as the global economy improves and businesses gain confidence to expand and remodel. Inventory levels in most channels remain low, and our sales backlog is above historical levels. To improve our sales, mix and efficiencies, we will introduce more new products with enhanced features and lower production complexity in the second half of the year. To alleviate manufacturing constraints, we have approved new capital investments of approximately $650 million to increase our production with most taking 12 to 18 months to implement. In the second quarter, we purchased $142 million of our stock at an average share price of approximately $208 for a total of $827 million since we initiated our purchasing program. With our strong balance sheet and historically low leverage, we are reviewing additional investments to expand our sales and profitability.

“For the quarter, our Flooring Rest of the World Segment’s sales increased 68% as reported and 50% on a constant currency and days basis. The segment’s operating margins increased from 5.9% to 19.7% as reported. The increase was due to higher volume, pricing and mix improvements and a reduction of Covid restrictions partially offset by inflation. All our major product categories improved significantly during the period as residential sales expanded in all regions. We have implemented multiple price increases in most product categories to cover inflation in materials and freight. Raw material supplies are problematic and have impacted our LVT production and sales the most. We anticipate material and freight challenges will continue to impact our business in the third quarter. Sales of our high-end laminate continue to grow dramatically as our proprietary products are being widely accepted as a water-proof alternative to LVT and wood. We recently completed the acquisition of a laminate distributor in the U.K. that will improve our position in the market. Our LVT sales growth was strong during the period and could have been even higher if material shortages had not interrupted manufacturing. We are significantly expanding sales of our rigid LVT collections with our patented water-tight joints that prevent moisture from penetrating the floor. Our sheet vinyl sales rebounded strongly as retail stores opened in our primary markets. Our sheet vinyl distribution in Russia has expanded, and we are maximizing production to meet the growing demand. Our Australian and New Zealand flooring businesses delivered excellent results with sales and margins exceeding our expectations. Carpet sales are strengthening with the launch of new high-end wool and triexta collections that improved our mix. To expand our existing insulation business in Ireland and the U.K., we have signed an agreement to acquire an insulation manufacturer, which is pending government approval. Our panels business is running at full capacity and so far we have been able to manage material shortages without interruptions to our operations. To enhance our panel offering, we are commissioning a new line to create unique surfaces and visuals to differentiate our offering in the market.

“During the quarter, our Flooring North America Segment’s sales increased 35% as reported and on a constant basis and operating margin was 10.7% as reported, primarily due to higher volume, productivity, pricing and mix improvements and fewer Covid interruptions partially offset by inflation. Through the period, our order rate remained strong, and our sales backlog remains above historical levels. We are maximizing output at our facilities to support higher sales and improve our service. During the quarter, our production levels were hindered by local labor shortages and material supply, particularly in LVT, sheet vinyl and carpet. Ocean freight constraints delayed receipt of our imported products, impacting our sales, inventories and service levels. We implemented price increases as our material and transportation costs increased, and we have announced additional pricing actions as inflation continues. Our residential carpet sales continued their growth as consumers continue to invest in their homes. Our commercial sales have improved as businesses increase remodeling and new construction projects. To support higher demand of our premium laminate collections, we have implemented many process improvements to maximize our U.S. production and are importing product from our global operations. Our laminate expansion remains on schedule and should be operational by the end of this year. Our new waterproof Ultrawood collections are being launched as a high-performance alternative to typical engineered wood floors. Our LVT and sheet vinyl sales continue to increase, with growth in the residential retail and new construction channels. We have enhanced our LVT offering with more realistic visuals, proprietary water-tight joints and improved stain and scratch resistance. When material availability increases, we should see further improvement in our U.S. LVT manufacturing, which will support our recent product launches.

“For the quarter, our Global Ceramic Segment’s sales increased 38% as reported and 34% on a constant currency and days basis. The segment’s operating margin increased to 13.1% as reported, primarily due to higher volume, productivity, pricing and mix improvements and fewer Covid disruptions partially offset by inflation. Our ceramic businesses around the world have greatly improved, with strength in the residential channel and increasing commercial sales. All of them have low inventories, which impacted our sales growth and service levels. We continue to raise prices to cover material, energy and transportation inflation. Our U.S. ceramic business is strengthening, and we are improving our product mix with new shapes, sizes, and surface structures. Our countertop sales and mix continued to improve as we expand our premium offering with new technologies. Our Mexican and Brazilian ceramic businesses are very strong, with our residential business in both regions at historically high levels and commercial still recovering. Due to capacity constraints, our facilities could not fulfill customer demand, so we are allocating our production. We are expanding operations in Mexico this quarter, and we have initiated new investments to increase capacity in Brazil. Our European ceramic business delivered strong sales and profitability as pricing, mix and productivity improved our margins. We increased sales of our premium slabs, small sizes, outdoor and antibacterial collections. To support sales of our high-end collections, we have initiated expansion projects which will take through next year to complete. Our ceramic sales in Russia were robust across all channels with our direct sales to customers through our owned stores and new construction projects outperforming. We have initiated expansion plans in Russia with new production expected in the second half of next year.

“The global economy should continue to improve due to low interest rates, government stimulus and the success of COVID vaccines. Around the world, flooring sales trends remain favorable with residential remodeling and new construction at high levels and commercial projects strengthening. In the third period, we expect our strong sales to continue, with typical seasonal slowing from the second quarter. We will expand the introduction of new products with additional features and increase our sales investments to enhance our future sales and mix. Material, energy and transportation inflation is expected to continue and will require further pricing actions to offset. Most of our facilities should operate at high utilization rates though ongoing material and local labor constraints will limit our production. Our Global Ceramic and Flooring Rest of the World segments will observe their European vacation schedules in the third quarter, which reduces production and increases costs in the period. In many countries, future government actions to contain Covid remain a risk and could impact our business. Given these factors, we anticipate our third quarter adjusted EPS to be $3.71 to $3.81, excluding any restructuring charges.

“We entered this year with uncertainty about Covid, the economic recovery, home renovation and new construction. Our business is stronger than we had anticipated, and we are increasing investments to support additional growth and improve efficiencies. Longer term, housing sales and remodeling are expected to remain at a high level, apartment renovation should accelerate as rent deferment expires and investments in commercial projects should continue to strengthen. We are expanding our operations and introducing new innovations to maximize our results. Our balance sheet is strong, and we are exploring additional internal and acquisition opportunities.”

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 July 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 # 6767965. A replay will be available until August 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 # 6767965.

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


 



MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES                
(Unaudited)                
Condensed Consolidated Statement of Operations Data   Three Months Ended   Six Months Ended
(Amounts in thousands, except per share data)   July 3,2021   June 27, 2020   July 3,2021   June 27, 2020
                 
Net sales   $ 2,953,833     2,049,800       5,622,859     4,335,563  
Cost of sales     2,051,626     1,679,833       3,928,883     3,349,156  
    Gross profit     902,207     369,967       1,693,976     986,407  
Selling, general and administrative expenses     497,783     430,925       972,037     895,883  
Operating income (loss)     404,424     (60,958 )     721,939     90,524  
Interest expense     14,894     12,956       30,135     21,627  
Other (income) expense, net     (11,168 )   1,037       (13,395 )   6,716  
    Earnings (loss) before income taxes     400,698     (74,951 )     705,199     62,181  
Income tax expense (benefit)     64,245     (26,363 )     131,935     304  
        Net earnings (loss) including noncontrolling interests     336,453     (48,588 )     573,264     61,877  
Net earnings (loss) attributable to noncontrolling interests     168     (331 )     172     (380 )
Net earnings (loss) attributable to Mohawk Industries, Inc.   $ 336,285     (48,257 )     573,092     62,257  
                 
Basic earnings (loss) per share attributable to Mohawk Industries, Inc.                
Basic earnings (loss) per share attributable to Mohawk Industries, Inc.   $ 4.84     (0.68 )     8.21     0.87  
Weighted-average common shares outstanding - basic     69,432     71,186       69,809     71,364  
                 
Diluted earnings (loss) per share attributable to Mohawk Industries, Inc.                
Diluted earnings (loss) per share attributable to Mohawk Industries, Inc.   $ 4.82     (0.68 )     8.18     0.87  
Weighted-average common shares outstanding - diluted     69,745     71,186       70,102     71,547  
                 
                 
                 
Other Financial Information                
(Amounts in thousands)                
Net cash provided by operating activities   $ 338,391     568,521       597,996     763,495  
Less: Capital expenditures     112,703     80,639       227,439     196,271  
Free cash flow   $ 225,688     487,882       370,557     567,224  
                 
Depreciation and amortization   $ 148,466     154,094       299,681     299,610  
                 
                 
Condensed Consolidated Balance Sheet Data                
(Amounts in thousands)                
            July 3,2021   June 27, 2020
ASSETS                
Current assets:                
    Cash and cash equivalents           $ 753,677     737,712  
    Short-term investments             662,358     56,700  
    Receivables, net             2,017,622     1,586,398  
    Inventories             2,081,967     1,922,048  
    Prepaid expenses and other current assets             434,932     443,140  
        Total current assets             5,950,556     4,745,998  
Property, plant and equipment, net             4,459,380     4,434,544  
Right of use operating lease assets             383,343     318,047  
Goodwill             2,609,174     2,541,906  
Intangible assets, net             922,699     910,838  
Deferred income taxes and other non-current assets             467,641     418,071  
    Total assets           $ 14,792,793     13,369,404  
LIABILITIES AND STOCKHOLDERS' EQUITY                
Current liabilities:                
    Short-term debt and current portion of long-term debt           $ 958,781     135,350  
    Accounts payable and accrued expenses             2,119,154     1,618,584  
    Current operating lease liabilities             100,951     118,296  
        Total current liabilities             3,178,886     1,872,230  
Long-term debt, less current portion             1,723,294     2,573,155  
Non-current operating lease liabilities             292,101     226,555  
Deferred income taxes and other long-term liabilities             824,570     772,600  
        Total liabilities             6,018,851     5,444,540  
Total stockholders' equity             8,773,942     7,924,864  
    Total liabilities and stockholders' equity           $ 14,792,793     13,369,404  
                 
Segment Information   Three Months Ended   As of or for the Six Months Ended
(Amounts in thousands)   July 3,2021   June 27, 2020   July 3,2021   June 27, 2020
                 
Net sales:                
    Global Ceramic   $ 1,039,503     753,335       1,969,374     1,601,785  
    Flooring NA     1,081,189     800,088       2,050,439     1,648,418  
    Flooring ROW     833,141     496,377       1,603,046     1,085,360  
        Consolidated net sales   $ 2,953,833     2,049,800       5,622,859     4,335,563  
                 
Operating income (loss):                
    Global Ceramic   $ 136,435     (33,809 )     224,239     14,168  
    Flooring NA     115,943     (45,484 )     197,241     (9,278 )
    Flooring ROW     163,886     29,478       323,192     105,294  
    Corporate and intersegment eliminations     (11,840 )   (11,143 )     (22,733 )   (19,660 )
        Consolidated operating income (loss)   $ 404,424     (60,958 )     721,939     90,524  
                 
Assets:                
    Global Ceramic           $ 5,206,786     5,112,084  
    Flooring NA             3,870,309     3,682,638  
    Flooring ROW             4,240,433     3,770,581  
    Corporate and intersegment eliminations             1,475,265     804,101  
        Consolidated assets           $ 14,792,793     13,369,404  


Reconciliation of Net Earnings (Loss) 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   Six Months Ended    
        July 3,2021   June 27, 2020   July 3,2021   June 27, 2020    
Net earnings (loss) attributable to Mohawk Industries, Inc.       $ 336,285     (48,257 )   573,092     62,257      
Adjusting items:                        
Restructuring, acquisition and integration-related and other costs         6,094     100,336     17,971     112,266      
Resolution of foreign non-income tax contingencies         (6,211 )   -     (6,211 )   -      
One-time tax planning election         (26,731 )   -     (26,731 )   -      
Income taxes         923     (25,723 )   (1,812 )   (28,802 )    
Adjusted net earnings attributable to Mohawk Industries, Inc.       $ 310,360     26,356     556,309     145,721      
                         
Adjusted diluted earnings per share attributable to Mohawk Industries, Inc.       $ 4.45     0.37     7.94     2.04      
Weighted-average common shares outstanding - diluted         69,745     71,186     70,102     71,547      
                         
 
 
                         
Reconciliation of Total Debt to Net Debt Less Short-Term Investments                        
(Amounts in thousands)                        
        July 3,2021                
Short-term debt and current portion of long-term debt       $ 958,781                  
Long-term debt, less current portion         1,723,294                  
Total debt         2,682,075                  
Less: Cash and cash equivalents         753,677                  
Net Debt         1,928,398                  
Less: Short-term investments         662,358                  
 Net debt less short-term investments       $ 1,266,040                  
                         
                         
                         
                         
                         
Reconciliation of Operating Income to Adjusted EBITDA                        
(Amounts in thousands)                       Trailing Twelve
        Three Months Ended   Months Ended
        September 26, 2020   December 31, 2020   April 3, 2021   July 3,2021   July 3,2021
Operating income       $ 262,744     282,733     317,515     404,424     1,267,416  
Other income         726     6,742     2,227     11,168     20,863  
Net income attributable to noncontrolling interests         (336 )   (176 )   (4 )   (168 )   (684 )
Depreciation and amortization (1)         151,342     156,555     151,216     148,466     607,579  
EBITDA         414,476     445,854     470,954     563,890     1,895,174  
Restructuring, acquisition and integration-related and other costs         26,925     15,947     6,059     (2,737 )   46,194  
 Adjusted EBITDA       $ 441,401     461,801     477,013     561,153     1,941,368  
                         
Net Debt less short-term investments to Adjusted EBITDA                       0.7  
(1) Includes $2,620 of accelerated depreciation in Q2 2021 with $5,243 in Q3 2020, $6,435 in Q4 2020 and $5,818 in Q1 2021.                
                         
Reconciliation of Net Sales to Net Sales on a Constant Exchange Rate and on Constant Shipping Days                     
(Amounts in thousands)                        
        Three Months Ended   Six Months Ended    
        July 3,2021   June 27, 2020   July 3,2021   June 27, 2020    
Net sales       $ 2,953,833     2,049,800     5,622,859     4,335,563      
Adjustment to net sales on constant shipping days         (20,418 )   -     (131,365 )   -      
Adjustment to net sales on a constant exchange rate         (97,818 )   -     (161,717 )   -      
Net sales on a constant exchange rate and constant shipping days   $ 2,835,597     2,049,800     5,329,777     4,335,563      
                         
                         
                         
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 Ceramic       July 3,2021   June 27, 2020            
Net sales       $ 1,039,503     753,335              
Adjustment to segment net sales on constant shipping days         (8,193 )   -              
Adjustment to segment net sales on a constant exchange rate         (22,242 )   -              
Segment net sales on a constant exchange rate and constant shipping days   $ 1,009,068     753,335              
                         
                         
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 ROW       July 3,2021   June 27, 2020            
Net sales       $ 833,141     496,377              
Adjustment to segment net sales on constant shipping days         (12,225 )   -              
Adjustment to segment net sales on a constant exchange rate         (75,575 )   -              
Segment net sales on a constant exchange rate and constant shipping days   $ 745,341     496,377              
                         
                         
Reconciliation of Gross Profit to Adjusted Gross Profit                        
(Amounts in thousands)                        
        Three Months Ended            
        July 3,2021   June 27, 2020            
Gross Profit       $ 902,207     369,967              
Adjustments to gross profit:                        
Restructuring, acquisition and integration-related and other costs         5,452     69,478              
  Adjusted gross profit       $ 907,659     439,445              
                         
                         
                         
Reconciliation of Selling, General and Administrative Expenses to Adjusted Selling, General and Administrative Expenses                
(Amounts in thousands)                        
        Three Months Ended            
        July 3,2021   June 27, 2020            
Selling, general and administrative expenses       $ 497,783     430,925              
Adjustments to selling, general and administrative expenses:                        
Restructuring, acquisition and integration-related and other costs         (1,480 )   (27,282 )            
  Adjusted selling, general and administrative expenses       $ 496,303     403,643              
                   
                         
                         
                         
Reconciliation of Operating Income (Loss) to Adjusted Operating Income                        
(Amounts in thousands)                        
        Three Months Ended            
        July 3,2021   June 27, 2020            
Operating income (loss)       $ 404,424     (60,958 )            
Adjustments to operating income (loss):                        
Restructuring, acquisition and integration-related and other costs         6,932     96,760              
  Adjusted operating income       $ 411,356     35,802              
                         
                         
Reconciliation of Segment Operating Income (Loss) to Adjusted Segment Operating Income                      
(Amounts in thousands)                        
        Three Months Ended            
Global Ceramic       July 3,2021   June 27, 2020            
Operating income (loss)       $ 136,435     (33,809 )            
Adjustments to segment operating income (loss):                        
Restructuring, acquisition and integration-related and other costs         726     37,672              
  Adjusted segment operating income       $ 137,161     3,863              
                         
                         
                         
Reconciliation of Segment Operating Income (Loss) to Adjusted Segment Operating Income (Loss)                    
(Amounts in thousands)                        
        Three Months Ended            
Flooring NA       July 3,2021   June 27, 2020            
Operating income (loss)       $ 115,943     (45,484 )            
Adjustments to segment operating income (loss):                        
Restructuring, acquisition and integration-related and other costs         5,487     28,226              
  Adjusted segment operating income (loss)       $ 121,430     (17,258 )            
                         
                         
                         
Reconciliation of Segment Operating Income to Adjusted Segment Operating Income                      
(Amounts in thousands)                        
        Three Months Ended            
Flooring ROW       July 3,2021   June 27, 2020            
Operating income       $ 163,886     29,478              
Adjustments to segment operating income:                        
Restructuring, acquisition and integration-related and other costs         442     29,614              
  Adjusted segment operating income       $ 164,328     59,092              
                         
                         
                         
Reconciliation of Earnings (Loss) Including Noncontrolling Interests Before Income Taxes to Adjusted Earnings Including Noncontrolling Interests Before Income Taxes        
(Amounts in thousands)                        
        Three Months Ended            
        July 3,2021   June 27, 2020            
Earnings (loss) before income taxes       $ 400,698     (74,951 )            
Net (earnings) loss attributable to noncontrolling interests         (168 )   331              
Adjustments to earnings (loss) including noncontrolling interests before income taxes:                      
Restructuring, acquisition and integration-related and other costs         6,094     100,336              
Resolution of foreign non-income tax contingencies         (6,211 )   -              
  Adjusted earnings including noncontrolling interests before income taxes       $ 400,413     25,716              
                         
                         
                         
                         
Reconciliation of Income Tax Expense (Benefit) to Adjusted Income Tax Expense (Benefit)                      
(Amounts in thousands)                        
        Three Months Ended            
        July 3,2021   June 27, 2020            
Income tax expense (benefit)       $ 64,245     (26,363 )            
One-time tax planning election         26,731     -              
Income tax effect of adjusting items         (923 )   25,723              
  Adjusted income tax expense (benefit)       $ 90,053     (640 )            
                         
Adjusted income tax rate         22.5 %   (2.5 )%            
                         
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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Source: Mohawk Industries, Inc.