<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[Mark One]
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 28, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
----------- ----------
Commission File Number: 01-19826
MOHAWK INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 52-1604305
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
Post Office Box 12069, 160 South Industrial 30703
Boulevard, Calhoun, Georgia
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (706) 629-7721
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
------ -----
The number of shares outstanding of the issuer's classes of capital stock as of
November 5, 1996, the latest practicable date, is as follows: 34,460,484 shares
of Common Stock, $.01 par value.
<PAGE>
MOHAWK INDUSTRIES, INC.
INDEX
<TABLE>
<CAPTION>
Page No.
-------
Part I. Financial Information:
<S> <C>
Item 1. Financial Statements
Condensed Consolidated Balance Sheets -
September 28, 1996 and December 31, 1995 3
Condensed Consolidated Statements of Earnings -
Three months ended September 28, 1996 and
September 30, 1995 5
Nine months ended September 28, 1996 and
September 30, 1995 6
Condensed Consolidated Statements of Cash Flows -
Nine months ended September 28, 1996 and
September 30, 1995 7
Notes to Condensed Consolidated Financial Statements 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 11
Part II. Other Information 13
</TABLE>
2
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
September 28, 1996 December 31, 1995
----------------------- ----------------------
<S> <C> <C>
Current assets:
Receivables $ 258,803 177,778
Inventories 328,034 299,191
Prepaid expenses 18,131 17,607
Deferred income taxes 12,858 12,858
----------------------- ----------------------
Total current assets 617,826 507,434
----------------------- ----------------------
Property, plant and equipment, at cost 522,150 471,048
Less accumulated depreciation and
amortization 191,612 153,082
----------------------- ----------------------
Net property, plant and equipment 330,538 317,966
----------------------- ----------------------
Other assets 76,451 77,752
----------------------- ----------------------
Total assets $ 1,024,815 903,152
======================= ======================
</TABLE>
See accompanying notes to condensed consolidated financial statements.
3
<PAGE>
MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS, CONTINUED
LIABILITIES AND STOCKHOLDERS' EQUITY
(In thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
September 28, 1996 December 31, 1995
------------------ -----------------
<S> <C> <C>
Current liabilities:
Current portion of long-term debt and notes payable $ 41,822 61,262
Accounts payable and accrued expenses 235,400 201,372
------------------ -----------------
Total current liabilities 277,222 262,634
Deferred income taxes 21,742 21,742
Long-term debt 400,911 341,775
Other long-term liabilities 5,073 2,098
------------------ -----------------
Total liabilities 704,948 628,249
------------------ -----------------
Stockholders' equity:
Preferred stock, $.01 par value; 60,000 shares
authorized; no shares issued - -
Common stock, $.01 par value; 75,000 shares
authorized; 34,442 and 34,394 shares issued
in 1996 and 1995, respectively 344 344
Additional paid-in capital 130,824 122,747
Retained earnings 188,777 152,244
------------------ -----------------
319,945 275,335
Less:
Treasury stock, at cost; 1,302 shares in 1995 - 115
Deferred compensation from stock options 78 317
------------------ -----------------
Total stockholders' equity 319,867 274,903
------------------ -----------------
Total liabilities and stockholders' equity $ 1,024,815 903,152
================== =================
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4
<PAGE>
MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
---------------------------------------------------
September 28, 1996 September 30, 1995
--------------------- ----------------------
<S> <C> <C>
Net sales $ 471,199 425,594
Cost of sales 361,870 330,683
--------------------- ----------------------
Gross profit 109,329 94,911
Selling, general and administrative expenses 74,782 72,345
Restructuring costs - 2,936
Carrying value reduction of property, plant and equipment 1,350 -
--------------------- ----------------------
Operating income 33,197 19,630
--------------------- ----------------------
Other expense:
Interest expense 7,944 8,603
Other expense, net 795 212
--------------------- ----------------------
8,739 8,815
--------------------- ----------------------
Earnings before income taxes 24,458 10,815
Income taxes 9,658 4,186
--------------------- ----------------------
Net earnings $ 14,800 6,629
===================== ======================
Earnings per common and common
equivalent share $ 0.43 0.20
===================== ======================
Weighted average common and common
equivalent shares outstanding 34,823 33,994
===================== ======================
</TABLE>
See accompanying notes to condensed consolidated financial statements.
5
<PAGE>
MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
-----------------------------------------------
September 28, 1996 September 30, 1995
------------------ -------------------
<S> <C> <C>
Net sales $ 1,329,418 1,233,596
Cost of sales 1,015,791 962,670
------------------ -------------------
Gross profit 313,627 270,926
Selling, general and administrative expenses 224,134 206,964
Restructuring costs - 5,610
Carrying value reduction of property, plant and equipment 1,350 2,711
------------------ -------------------
Operating income 88,143 55,641
------------------ -------------------
Other expense:
Interest expense 25,126 27,081
Other expense, net 2,640 1,553
------------------ -------------------
27,766 28,634
------------------ -------------------
Earnings before income taxes 60,377 27,007
Income taxes 23,844 10,452
------------------ -------------------
Net earnings $ 36,533 16,555
================== ===================
Earnings per common and common
equivalent share $ 1.06 0.49
================== ===================
Weighted average common and common
equivalent shares outstanding 34,479 33,809
================== ===================
</TABLE>
See accompanying notes to condensed consolidated financial statements.
6
<PAGE>
MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
---------------------------------------------------
September 28, 1996 September 30, 1995
--------------------- ---------------------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 36,533 16,555
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization 41,375 40,991
Provision for doubtful accounts 8,939 5,514
Carrying value reduction of property, plant and equipment 1,350 2,711
Changes in operating assets and liabilities, net of effect
of acquisition:
Receivables (95,994) (11,282)
Inventories (28,843) (6,857)
Accounts payable and accrued expenses 38,793 49,238
Other assets and prepaid expenses (1,592) 4,825
Other liabilities (112) (9,638)
--------------------- ---------------------
Net cash provided by operating activities 449 92,057
--------------------- ---------------------
Cash flows from investing activities:
Additions to property, plant and equipment, net (28,952) (33,257)
Acquisition, net of cash acquired - (44,000)
---------------------------------------------------
Net cash used in investing activities (28,952) (77,257)
--------------------- ---------------------
Cash flows from financing activities:
Net change in revolving line of credit 26,536 43,152
Payments on term loans (8,040) (5,081)
Redemption of Galaxy indebtedness - (44,487)
Change in outstanding checks in excess of cash 1,576 (12,546)
Common stock transactions 8,431 4,162
--------------------- ---------------------
Net cash provided by (used in) financing activities 28,503 (14,800)
--------------------- ---------------------
Net change in cash - -
Cash, beginning of year - -
---------------------------------------------------
Cash, end of period $ - -
===================================================
Net cash paid (received) during the period for:
Interest $ 25,417 27,979
===================== =====================
Income taxes $ 18,187 (331)
===================== =====================
</TABLE>
See accompanying notes to condensed consolidated financial statements.
7
<PAGE>
MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share data)
(Unaudited)
1. The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with the instructions to Form 10-Q and do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. These statements should be
read in conjunction with the financial statements and notes thereto included in
the Company's 1995 Annual Report filed on Form 10-K, as filed with the
Securities and Exchange Commission, which includes consolidated financial
statements for the fiscal year ended December 31, 1995.
The Company's earnings per share are computed by dividing net earnings by the
weighted average common and common equivalent shares outstanding. Dilutive
common stock options are included in the earnings per share calculation using
the treasury stock method.
During the nine months ended September 28, 1996, the Company recorded a direct
increase in stockholders' equity of $7,158 as a result of the tax benefit from
the exercise of stock options that were granted primarily in 1988 and 1989 in
connection with the Company's 1988 leveraged buyout.
Certain prior year financial statement balances have been reclassified to
conform with the current year's presentation.
2. Receivables
Receivables are as follows:
<TABLE>
<CAPTION>
September 28, 1996 December 31, 1995
----------------------- ---------------------
<S> <C> <C>
Customers, trade $ 287,402 206,015
Income tax receivable 3,001 1,298
Other 3,311 2,610
----------------------- ---------------------
293,714 209,923
Less allowance for discounts, returns, claims
and doubtful accounts 34,911 32,145
----------------------- ---------------------
Net receivables $ 258,803 177,778
======================= =====================
</TABLE>
3. Inventories
The components of inventories are as follows:
<TABLE>
<CAPTION>
September 28, 1996 December 31, 1995
----------------------- ---------------------
<S> <C> <C>
Finished goods $ 172,459 165,137
Work in process 48,228 47,125
Raw materials 107,347 86,929
----------------------- ---------------------
Total inventories $ 328,034 299,191
======================= =====================
</TABLE>
8
<PAGE>
MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
(In thousands, except per share data)
(Unaudited)
4. Other assets
Other assets are as follows:
<TABLE>
<CAPTION>
September 28, 1996 December 31, 1995
----------------------- ---------------------
<S> <C> <C>
Goodwill, net of accumulated amortization of
$5,219 and $4,108, respectively $ 54,049 55,160
Other assets 22,402 22,592
----------------------- ---------------------
Total other assets $ 76,451 77,752
======================= =====================
</TABLE>
5. Accounts payable and accrued expenses
Accounts payable and accrued expenses are as follows:
<TABLE>
<CAPTION>
September 28, 1996 December 31, 1995
----------------------- ---------------------
<S> <C> <C>
Outstanding checks in excess of cash $ 32,457 30,881
Accounts payable, trade 115,341 98,122
Accrued expenses 72,292 53,574
Accrued compensation 15,310 18,795
------------------- ---------------------
Total accounts payable and accrued expenses $ 235,400 201,372
======================= =====================
</TABLE>
6. Notes payable and long-term debt
In June 1996, the Company amended and restated its revolving credit agreement to
decrease its credit availability from $300,000 to $250,000 due to decreasing
external financing needs.
During the second quarter of 1996, the Company acquired certain equipment,
primarily used for the extrusion of polypropylene yarn, valued at $21,200 in
exchange for a promissory note due in April 1997. The promissory note pays
interest at a variable rate that ranges from 0.25% to 0.875% above LIBOR.
7. Nonrecurring costs
In the third quarter of 1996, the Company recorded a charge of $1,350 arising
from a revision in the estimate of fair value of certain land, buildings and
equipment based on current market conditions related to the mill closings that
occurred in 1995. The after-tax effect of the charge for the three months and
nine months ended September 28, 1996 was $817, or $0.02 per share.
During the three months and nine months ended September 30, 1995, the Company
recorded restructuring costs of $2,936 and $5,610, respectively, related to
employee termination benefits, relocating inventories and equipment and other
costs associated with certain mill closings. In connection with the adoption of
FAS No. 121, the Company also recorded an impairment loss of $2,711 during the
nine months ended September 30, 1995 for the write-down of property, plant and
equipment to be disposed of related to these mill closings. The after-tax effect
of the restructuring costs and the impairment loss for the three months and nine
months ended September 30, 1995 was $1,800, or $0.05 per share, and $5,101, or
$0.15 per share, respectively.
9
<PAGE>
MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
(In thousands, except per share data)
(Unaudited)
8. Acquisition
On October 11, 1996, the Company announced it signed a letter of intent to
acquire certain assets of Diamond Rug & Carpet Mills, Inc. ("Diamond"). The
proposed purchase price will be a maximum of $43,000 in cash, subject to
adjustment based on the level of inventory at closing. Under the letter of
intent, Mohawk has agreed to purchase selected facilities owned by Diamond's
principal shareholders. If completed, the acquisition will be accomplished
through a prepackaged or other plan of reorganization under Chapter 11 of the
United Stated Bankruptcy Code.
10
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations
Quarter Ended September 28, 1996 As Compared With Quarter Ended
- ---------------------------------------------------------------
September 30, 1995
- ------------------
Net sales for the quarter ended September 28, 1996 were $471.2 million,
which represented an increase of 11% from the $425.6 million reported for the
third quarter of 1995. This sales increase was attributable to an improvement in
the Company's market share which the Company believes primarily resulted from
changes in the retail segment of the industry and Mohawk's realignment of its
residential sales forces under a regional structure. Additionally, American Rug
Craftsmen continued to experience strong sales growth.
Gross profit for the third quarter of the current year was $109.3 million
(23.2% of net sales). In the third quarter of 1995, gross profit was $94.9
million (22.3% of net sales). This increase is due to product mix,
manufacturing improvements from restructuring the residential operations, higher
production levels resulting in better absorption of fixed costs and
manufacturing improvements in other divisions. The manufacturing consolidations
include the closing of five residential manufacturing facilities during 1995 as
well as the realignment of the remaining residential mills to better utilize the
strengths of each mill. The Company's integration of its manufacturing,
distribution and information systems areas is progressing as planned and
continues to contribute to the margin improvement.
Selling, general and administrative expenses for the current quarter were
$74.8 million (15.9% of net sales) compared to $72.3 million (17.0% of net
sales) for the prior year's third quarter. The percentage decrease was
primarily due to better control of discretionary spending and better leveraging
of costs on strong sales growth.
During the third quarter of 1996, the Company recorded an additional $1.4
million charge for nonrecurring costs related to the mill closings that occurred
in 1995. The additional charge arises from a revision in the estimate of the
fair value of certain land, buildings and equipment based upon current market
conditions. The after tax effect of the charge is $.8 million, or $0.02 per
share.
Interest expense for the current period was $7.9 million compared to $8.6
million in the third quarter of 1995. The primary factors contributing to the
decrease were a reduction in debt levels and lower interest rates on the
Company's revolving credit agreement.
In the current period, income tax expense was $9.7 million, or 39.5% of
earnings before income taxes. In the third quarter of 1995, income tax expense
was $4.2 million, or 38.7% of earnings before income taxes. The primary reason
for the lower effective tax rate in 1995 was certain nonrecurring deductions
that were treated as permanent differences in 1995.
Nine Months Ended September 28, 1996 As Compared With Nine Months Ended
- -----------------------------------------------------------------------
September 30, 1995
- ------------------
Net sales for the nine months ended September 28, 1996 were $1,329.4
million, which represented an increase of 8% from the $1,233.6 million reported
for the first nine months of 1995. This sales increase was attributable to an
improvement in the Company's market share which the Company believes primarily
resulted from changes in the retail segment of the industry and Mohawk's
realignment of its residential sales forces under a regional structure.
Additionally, American Rug Craftsmen continued to experience strong sales
growth.
Gross profit for the first nine months of the current year was $313.6
million (23.6% of net sales). In the first nine months of 1995, gross profit was
$270.9 million (22.0% of net sales). This increase is due to product mix,
manufacturing improvements from restructuring the residential operations, higher
production levels resulting in better absorption of fixed costs and
manufacturing improvements in other divisions.
Selling, general and administrative expenses for the first nine months of
the current year were $224.1 million (16.9% of net sales) compared to $207.0
million (16.8% of net sales) for the prior year's first nine months. The higher
percentage in 1996 is primarily due to higher sample costs incurred in the first
and second quarters of 1996 as compared to 1995, which the Company believes are
the result of increased dealer sample orders in response to a competitor's
recent move into retail operations. Additionally, a higher provision for bad
debts was recorded in the first and second quarters of 1996 due to increased
sales volume.
During the third quarter of 1996, the Company recorded an additional $1.4
million charge for nonrecurring costs related to the mill closings that occurred
in 1995. The additional charge arises from a revision in the estimate of the
fair
11
<PAGE>
value of certain land, buildings and equipment based upon current market
conditions.
During the second and third quarters of 1995, the Company recorded
restructuring costs totalling of $5.6 million related to employee termination
benefits, relocating inventories and equipment and other costs associated with
certain mill closings. In connection with the adoption of FAS No. 121, the
Company also recorded an impairment loss to operating income of $2.7 million
during the second quarter of 1995 for the write-down of property, plant and
equipment to be disposed of related to these mill closings. The after-tax
effect of the restructuring costs and the impairment loss for the nine months
ended September 30, 1995 was $5.1 million, or $0.15 per share.
Interest expense for the current period was $25.1 million compared to $27.1
million in the first nine months of 1995. The primary factors for the decrease
were a reduction in debt levels and lower interest rates on the Company's
revolving credit agreement.
In the current period, income tax expense was $23.8 million, or 39.5% of
earnings before income taxes. In the first nine months of 1995, income tax
expense was $10.5 million, or 38.7% of earnings before income taxes. The primary
reason for the lower effective tax rate in 1995 was certain nonrecurring
deductions that were treated as permanent differences in 1995.
Liquidity and Capital Resources
The Company's primary capital requirements are for working capital, capital
expenditures and acquisitions. The Company's capital needs are met through a
combination of internally-generated funds, bank credit lines and credit terms
from suppliers. On June 6, 1996, the Company amended and restated its revolving
credit agreement to decrease its credit availability from $300 million to $250
million due to decreasing external financing needs.
The level of accounts receivable increased from $177.8 million at the
beginning of 1996 to $258.8 million at September 28, 1996. The $81.0 million
increase resulted primarily from strong sales growth and from seasonally higher
sales volume in September as compared to December. Inventories rose from $299.2
million at the beginning of 1996 to $328.0 million at September 28, 1996, due to
requirements to meet seasonal customer demand.
Capital expenditures totaled $50.2 million in the first nine months of 1996,
which included $21.2 million of equipment used primarily for the extrusion of
polypropylene yarn that was acquired in a noncash transaction in exchange for a
promissory note due in April 1997. The promissory note pays interest at a
variable rate that ranges from 0.25% to 0.875% above LIBOR. The capital
expenditures made during the first nine months of 1996 were incurred primarily
to modernize and expand manufacturing facilities and equipment. The Company's
capital projects are primarily focused on increasing capacity, improving
productivity and reducing costs. Capital spending for the remainder of 1996 is
expected to range from $5 million to $15 million, the majority of which will be
used to purchase equipment and expand existing plants.
On October 11, 1996, the Company announced that it signed a letter of intent
to acquire certain assets of Diamond Rug & Carpet Mills, Inc. The proposed
purchase price will be a maximum of $43.0 million in cash, subject to adjustment
based on the level of inventory at closing. Under the letter of intent, Mohawk
has agreed to purchase selected facilities owned by Diamond's principal
shareholders. If completed, the acquisition will be accomplished through a
prepackaged or other plan of reorganization under Chapter 11 of the United
States Bankruptcy Code and will be primarily financed through existing credit
facilities.
From time to time, the Company may publish forward-looking statements
relating to such matters as anticipated financial performance, business
prospects, proposed acquisitions, new products, and similar matters. The Private
Securities Litigation Reform Act of 1995 provides a safe harbor for forward-
looking statements. In order to comply with the terms of the safe harbor, the
Company notes that a variety of factors could cause the Company's actual results
and experience to differ materially from the anticipated results or other
expectations expressed in the Company's forward-looking statements. The risks
and uncertainties that may affect the operations, performance, development and
results of the Company's business include market conditions in the carpet
industry, raw material prices, timing of capital expenditures, the successful
integration of acquisitions and other risk factors.
Impact of Inflation
Inflation affects the Company's manufacturing costs and operating expenses.
The carpet industry has experienced moderate inflation in the prices of certain
raw materials and outside processing for the last three years. The Company has
generally passed along nylon fiber cost increases to its customers.
12
<PAGE>
Seasonality
The carpet business is seasonal, with the Company's second, third and fourth
quarters typically producing higher net sales and operating income. By
comparison, results for the first quarter tend to be the weakest. This
seasonality is primarily attributable to consumer residential spending patterns
and higher installation levels during the spring and summer months.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Company is involved in routine litigation from time to time in the
regular course of its business. Except as noted below, there are no material
legal proceedings pending or known to be threatened against the Company or any
of its property.
In June 1994, the Company and several other carpet manufacturers received
subpoenas to produce documents from a grand jury of the United States District
Court in Atlanta. The subpoenas were requested by the Antitrust Division of the
U. S. Department of Justice in connection with an investigation of the industry.
The Company believes that the results of this investigation will not have a
material adverse impact on the financial condition of the Company.
In December 1995, the Company and four other carpet manufacturers were added
as defendants in a purported class action lawsuit, In re Carpet Antitrust
Litigation, pending in the United States District Court for the Northern
District of Georgia, Rome Division. The amended complaint alleges price fixing
regarding polypropylene products in violation of Section One of the Sherman Act.
The Company is a party to two consolidation lawsuits captioned Gaehwiler v.
Sunrise Carpet Industries, Inc. et. al. and Patco Enterprises, Inc. v. Sunrise
Carpet Industries, Inc. et. al.; both of which were filed in the Superior Court
of the State of California, City and County of San Francisco earlier this year.
Both complaints were brought on behalf of a purported class of indirect
purchasers of carpet in the State of California and seek damages for alleged
violations of California antitrust and unfair competition laws. The Company
believes both of these lawsuits are without merit and intends to vigorously
defend against them.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
<TABLE>
<CAPTION>
No. Description
- --- -------------------------------------------------------------------------
<C> <S>
11 Statement re: Computation of Per Share Earnings
27 Financial Data Schedule
</TABLE>
(b) Reports on Form 8-K
None.
13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MOHAWK INDUSTRIES, INC.
Dated: November 6, 1996 By: /s/ David L. Kolb
------------------------------------
DAVID L. KOLB, Chairman of the Board and
Chief Executive Officer (principal
executive officer)
Dated: November 6, 1996 By: /s/ John D. Swift
------------------------------------
JOHN D. SWIFT, Chief Financial Officer,
Vice President-Finance and Assistant
Secretary (principal financial and
accounting officer)
14
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
No. Description
- --- -------------------------------------------------------------------------
<C> <S>
11 Statement re: Computation of Per Share Earnings
27 Financial Data Schedule
</TABLE>
15
<PAGE>
EXHIBIT 11
MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES
STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
(In thousands, except per share data)
(Unaudited)
NOTE: Earnings per share are presented in accordance with Regulation S-K, Item
601(b)(11) and APB Opinion No. 15.
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
----------------------------------- ----------------------------------
September 28, September 30, September 28, September 30,
1996 1995 1996 1995
----------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Net earnings $ 14,800 6,629 36,533 16,555
================ ================ ================ ================
Weighted average common and common
equivalent shares outstanding:
Weighted average common shares outstanding 34,392 33,017 34,074 32,698
Add weighted average common equivalent
shares - options to purchase common shares, net 431 977 405 1,111
---------------- ---------------- ---------------- ----------------
Weighted average common and common
equivalent shares outstanding $ 34,823 33,994 34,479 33,809
================ ================ ================ ================
Earnings per common and common
equivalent share $ 0.43 0.20 1.06 0.49
================ ================ ================ ================
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
MOHAWK INDUSTRIES, INC.'S QUARTERLY REPORT TO STOCKHOLDERS FOR THE
QUARTER ENDED SEPTEMBER 28, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-28-1996
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 293,714
<ALLOWANCES> 34,911
<INVENTORY> 328,034
<CURRENT-ASSETS> 617,826
<PP&E> 522,150
<DEPRECIATION> 191,612
<TOTAL-ASSETS> 1,024,815
<CURRENT-LIABILITIES> 277,222
<BONDS> 400,911
0
0
<COMMON> 344
<OTHER-SE> 319,523
<TOTAL-LIABILITY-AND-EQUITY> 1,024,815
<SALES> 1,329,418
<TOTAL-REVENUES> 1,329,418
<CGS> 1,015,791
<TOTAL-COSTS> 1,015,791
<OTHER-EXPENSES> 1,350<F1>
<LOSS-PROVISION> 8,939
<INTEREST-EXPENSE> 25,395
<INCOME-PRETAX> 60,377
<INCOME-TAX> 23,844
<INCOME-CONTINUING> 36,533
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 36,533
<EPS-PRIMARY> 1.06
<EPS-DILUTED> 1.06
<FN>
<F1> CARRYING VALUE REDUCTION OF PROPERTY, PLANT AND EQUIPMENT FROM REVISED FAIR
VALUE ESTIMATE BASED ON CURRENT MARKET CONDITIONS RELATING TO PRIOR YEAR'S
MILL CLOSINGS.
</FN>
</TABLE>
