<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 27, 1997
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 (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
Post Office Box 12069, 160 South Industrial Boulevard, Calhoun, Georgia 30703
(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
October 20, 1997, the latest practicable date, is as follows: 34,726,256 shares
of Common Stock, $.01 par value.
<PAGE>
MOHAWK INDUSTRIES, INC.
INDEX
Page No.
-------
Part I. Financial Information:
Item 1. Financial Statements
Condensed Consolidated Balance Sheets -
September 27, 1997 and December 31, 1996 3
Condensed Consolidated Statements of Earnings -
Three months ended September 27, 1997 and
September 28, 1996 5
Nine months ended September 27, 1997 and
September 28, 1996 6
Condensed Consolidated Statements of Cash Flows -
Nine months ended September 27, 1997 and
September 28, 1996 7
Notes to Condensed Consolidated Financial Statements 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 11
Item 3. Quantitative and Qualitative Disclosure About
Market Risks 12
Part II. Other Information 13
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
(In thousands)
(Unaudited)
September 27, 1997 December 31, 1996
------------------ -----------------
Current assets:
Receivables $253,806 215,594
Inventories 316,344 302,767
Prepaid expenses 7,723 18,298
Deferred income taxes 18,186 18,186
-------- -------
Total current assets 596,059 554,845
-------- -------
Property, plant and equipment, at cost 569,833 529,961
Less accumulated depreciation and
amortization 247,402 205,263
-------- -------
Net property, plant and equipment 322,431 324,698
-------- -------
Other assets 74,274 74,806
-------- -------
Total assets $992,764 954,349
======== =======
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 27, 1997 December 31, 1996
------------------ -----------------
<S> <C> <C>
Current liabilities:
Current portion of long-term debt and note
payable 21,772 41,832
Accounts payable and accrued expenses 255,220 201,315
-------- --------
Total current liabilities 276,992 243,147
Deferred income taxes 24,136 27,530
Long-term debt 302,916 345,748
Other long-term liabilities 3,774 4,725
-------- --------
Total liabilities 607,818 621,150
-------- --------
Stockholders' equity:
Preferred stock, $.01 par value; 60,000 shares
authorized; no shares issued - -
Common stock, $.01 par value; 75,000 shares
authorized; 34,692 and 34,471 shares issued
in 1997 and 1996, respectively 347 345
Additional paid-in capital 134,598 131,560
Retained earnings 250,001 201,294
-------- --------
Total stockholders' equity 384,946 333,199
-------- --------
Total liabilities and stockholders' equity $992,764 954,349
======== ========
</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)
Three Months Ended
-------------------------------
September 27, September 28,
1997 1996
------------- -------------
Net sales $500,818 466,539
Cost of sales 384,338 362,249
-------- -------
Gross profit 116,480 104,290
Selling, general and administrative expenses 74,441 69,792
Carrying value reduction of property, plant
and equipment - 1,350
-------- -------
Operating income 42,039 33,148
-------- -------
Other expense:
Interest expense 6,689 7,944
Other expense, net 871 746
-------- -------
7,560 8,690
-------- -------
Earnings before income taxes 34,479 24,458
Income taxes 13,626 9,658
-------- -------
Net earnings $ 20,853 14,800
======== =======
Earnings per common and common
equivalent share $ 0.60 0.43
======== =======
Weighted average common and common
equivalent shares outstanding 34,969 34,823
======== =======
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>
<S> <C> <C>
Nine Months Ended
----------------------------------------------
September 27, 1997 September 28, 1996
-------------------- ---------------------
Net sales $1,385,234 1,317,884
Cost of sales 1,067,999 1,018,590
---------- ---------
Gross profit 317,235 299,294
Selling, general and administrative expenses 212,928 209,977
Carrying value reduction of property, plant
and equipment - 1,350
---------- ---------
Operating income 104,307 87,967
---------- ---------
Other expense:
Interest expense 21,543 25,126
Other expense, net 2,256 2,464
---------- ---------
23,799 27,590
---------- ---------
Earnings before income taxes 80,508 60,377
Income taxes 31,801 23,844
---------- ---------
Net earnings $ 48,707 36,533
========== =========
Earnings per common and common
equivalent share $ 1.40 1.06
========== =========
Weighted average common and common
equivalent shares outstanding 34,877 34,479
========== =========
</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 27, September 28,
1997 1996
------------- -------------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 48,707 36,533
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization 45,343 41,375
Provision for doubtful accounts 5,584 8,939
Carrying value reduction of property, plant and
equipment - 1,350
Changes in operating assets and liabilities, net
of effects of acquisition:
Receivables (43,796) (96,364)
Inventories (1,604) (28,906)
Accounts payable and accrued expenses 63,548 38,871
Other assets and prepaid expenses 10,365 (1,237)
Other liabilities (2,489) (112)
--------- -------
Net cash provided by operating activities 125,658 449
--------- -------
Cash flows from investing activities:
Additions to property, plant and equipment, net (19,594) (28,952)
Acquisition (36,000) -
--------- -------
Net cash used in investing activities (55,594) (28,952)
--------- -------
Cash flows from financing activities:
Net change in revolving line of credit (42,973) 26,536
Payment of note payable (21,200) -
Payments on term loans (14,623) (8,040)
Proceeds from new loan 9,350 -
Proceeds from IRBs and other, net of payments 6,554 -
Change in outstanding checks in excess of cash (10,212) 1,576
Common stock transactions 3,040 8,431
--------- -------
Net cash provided by (used in) financing
activities (70,064) 28,503
--------- -------
Net change in cash - -
Cash, beginning of year - -
--------- -------
Cash, end of period $ - -
========= =======
Net cash paid during the period for:
Interest $ 22,968 25,417
========= =======
Income taxes $ 32,228 18,187
========= =======
</TABLE>
See accompanying notes to condensed consolidated financial statements.
7
<PAGE>
MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands)
(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 1996 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, 1996.
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 period financial statement balances have been reclassified to
conform with the current period's presentation.
2. Receivables
<TABLE>
<CAPTION>
<C> <S> <C> <C>
Receivables are as follows:
September 27, 1997 December 31, 1996
------------------ -----------------
Customers, trade $ 289,689 247,485
Other 1,055 2,095
--------- -------
290,744 249,580
Less allowance for discounts, returns,
claims and doubtful accounts 36,938 33,986
--------- -------
Net receivables $ 253,806 215,594
========= =======
3. Inventories
The components of inventories are as follows:
September 27, 1997 December 31, 1996
------------------ -----------------
Finished goods $ 165,386 150,890
Work in process 52,025 45,485
Raw materials 98,933 106,392
--------- -------
Total inventories $ 316,344 302,767
========= =======
8
</TABLE>
<PAGE>
MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
<C> <S> <C> <C>
4. Other assets
Other assets are as follows:
September 27, December 31,
1997 1996
------------- ------------
Goodwill, net of accumulated amortization of
$6,705 and $5,589, respectively $ 52,563 53,679
Other assets 21,711 21,127
-------- -------
Total other assets $ 74,274 74,806
======== =======
5. Accounts payable and accrued expenses
Accounts payable and accrued expenses are as follows:
September 27, December 31,
1997 1996
------------- ------------
Outstanding checks in excess of cash $ 21,588 31,800
Accounts payable, trade 133,195 86,527
Accrued expenses 62,930 49,628
Accrued compensation 37,507 33,360
-------- -------
Total accounts payable and accrued
expenses $255,220 201,315
======== =======
</TABLE>
6. Credit agreement
On April 15, 1997, the Company amended and restated its credit agreement to
provide for an interest rate of either (i) LIBOR plus 0.2% to 0.5%, depending
upon the Company's performance measured against certain financial ratios, or
(ii) the prime rate less 1.0%. Additionally, the termination date of the credit
agreement was extended to May 15, 2002.
7. Acquisition
On July 23, 1997, the Company acquired certain assets of Diamond Rug & Carpet
Mills, Inc. and other assets owned by Diamond's principal shareholders for
approximately $36,000 which consisted of $19,600 in cash, at closing, $7,000 in
cash over the six-month period following closing and a $9,350 note payable in
seven annual installments of principal plus interest at 6%. The acquisition was
accomplished through a plan of reorganization filed by Diamond under Chapter 11
of the United States Bankruptcy Code.
8. 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 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.
9
<PAGE>
MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
(In thousands)
(Unaudited)
9. Effect of accounting pronouncement not yet adopted
The Financial Accounting Standards Board issued FAS No. 128, Earnings per Share,
which will supersede APB No. 15, Earnings per Share. This statement, which the
Company is required to adopt in the fourth quarter of 1997, requires companies
to replace the presentation of primary EPS and fully diluted EPS with basic EPS
and diluted EPS. Basic EPS excludes dilution and is computed by dividing income
available to common stockholders by the weighted-average number of common shares
outstanding for the period. Diluted EPS reflects the dilution that could occur
if securities or other contracts to issue common stock were exercised or
converted into common stock or resulted in the issuance of common stock that
then shared in the earnings of the company. The Company does not believe the
implementation of FAS No.128 will have a material effect on the Company's
consolidated financial statements.
10
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
Quarter Ended September 27, 1997 As Compared With Quarter Ended September 28,
- -----------------------------------------------------------------------------
1996
- ----
Net sales for the quarter ended September 27, 1997 were $500.8 million, which
represented an increase of 7% from the $466.5 million reported for the third
quarter of 1996. The third quarter 1997 net sales comparison to the third
quarter of 1996 was favorably affected by incremental sales from the acquisition
of certain assets of Diamond Rug & Carpet Mills, Inc. Additionally, the sales
increase was partially attributable to a gain in market share which the Company
believes resulted from continued strong support of our independent dealer base
and strong overall acceptance of Mohawk products.
Gross profit for the third quarter of the current year was $116.5 million
(23.3% of net sales). In the third quarter of 1996, gross profit was $104.3
million (22.4% of net sales). The stronger gross profit percentage in 1997 is
the result of manufacturing improvements from restructuring and improved product
mix.
Selling, general and administrative expenses for the current quarter were
$74.4 million (14.9% of net sales) compared to $69.8 million (15.0% of net
sales) for the prior year's third period.
Interest expense for the current period was $6.7 million compared to $7.9
million in the third quarter of 1996. The primary factor for the decrease was a
reduction in debt levels in the third quarter of 1997 as compared to the third
quarter of 1996.
In the current period, income tax expense was $13.6 million, compared to $9.7
million in the third quarter of 1996, or 39.5% of earnings before income taxes
for both periods.
Nine Months Ended September 27, 1997 As Compared With Nine Months Ended
- -----------------------------------------------------------------------
September 28, 1996
- ------------------
Net sales for the first nine months ended September 27, 1997 were $1,385.2
million, which represented an increase of 5% from the $1,317.9 million reported
for the first nine months of 1996. This sales increase resulted from
incremental sales from the acquisition of certain assets of Diamond Rug & Carpet
Mills, Inc., a gain in market share which the Company believes resulted from
continued strong support of our independent dealer base and strong overall
acceptance of Mohawk products.
Gross profit for the first nine months of the current year was $317.2 million
(22.9% of net sales). In the first nine months of 1996, gross profit was $299.3
million (22.7% of net sales).
Selling, general and administrative expenses for the current period were
$212.9 million (15.4% of net sales) compared to $210.0 million (15.9% of net
sales) for the prior year's first nine months. The percentage decrease was
primarily due to lower sample and bad debt expense in the first nine months of
1997.
Interest expense for the current period was $21.5 million compared to $25.1
million in the first nine months of 1996. The primary factor for the decrease
was a reduction in debt levels in the first nine months of 1997 as compared to
the first nine months of 1996.
In the current period, income tax expense was $31.8 million, compared to $23.8
million in the first nine months of 1996, or 39.5% of earnings before income
taxes for both periods.
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.
The level of accounts receivable increased from $215.6 million at the
beginning of 1997 to $253.8 million at September 27, 1997. The $38.2 million
increase resulted primarily from seasonally higher sales volume in the third
quarter as compared to December. Inventories rose from $302.8 million at the
beginning of 1997 to $316.3 million at September 27, 1997, due to requirements
to meet seasonal customer demand.
11
<PAGE>
Capital expenditures, including the purchase of certain property, plant and
equipment from Diamond Rug & Carpet Mills, Inc., totaled $55.6 million in the
first nine months of 1997 and 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 1997 is expected to range from
$10.0 million to $15.0 million, the majority of which will be used to increase
capacity and productivity.
On April 15, 1997, the Company amended and restated its credit agreement to
provide for an interest rate of either (i) LIBOR plus 0.2% to 0.5%, depending
upon the Company's performance measured against certain financial ratios, or
(ii) the prime rate less 1.0%. Additionally, the termination date of the credit
agreement was extended to May 15, 2002.
On July 23, 1997, the Company acquired certain assets of Diamond Rug & Carpet
Mills, Inc. and other assets owned by Diamond's principal shareholders for
approximately $36.0 million which consisted of $19.6 million in cash, at
closing, $7.0 million in cash over the six-month period following closing and a
$9.4 million note payable in seven annual installments of principal plus
interest at 6%. The acquisition was accomplished through a plan of
reorganization filed by Diamond under Chapter 11 of the United States Bankruptcy
Code and was financed primarily through existing credit facilities.
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.
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.
EFFECT OF ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED
The Financial Accounting Standards Board issued FAS No. 128, Earnings Per
Share, which will supersede APB No. 15, Earnings Per Share. This statement,
which the Company is required to adopt in the fourth quarter of 1997, requires
companies to replace the presentation of primary EPS and fully diluted EPS with
basic EPS and diluted EPS. Basic EPS excludes dilution and is computed by
dividing income available to common stockholders by the weighted-average number
of common shares outstanding for the period. Diluted EPS reflects the dilution
that could occur if securities or other contracts to issue common stock were
exercised or converted into common stock or resulted in the issuance of common
stock that then shared in the earnings of the company. The Company does not
believe the implementation of FAS No. 128 will have a material effect on the
Company's consolidated financial statements.
FORWARD-LOOKING INFORMATION
Certain of the matters discussed in the preceding pages, including but not
limited to, the assumptions regarding the Company's ability to continue to
successfully integrate the acquired Diamond assets may constitute "forward-
looking statements" within the meaning of Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934, as amended.
Forward-looking statements involve a number of risks and uncertainties. Factors
that may cause actual results to differ materially include, but are not limited
to, the following: market conditions in the carpet industry, raw material
prices, timing and level of capital expenditures, the successful integration of
acquisitions, the successful introduction of new products and other risks
identified from time to time in the Company's SEC reports and public
announcements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISKS
Not applicable.
12
<PAGE>
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.
In September 1997, the Court determined that the plaintiffs met their burden of
establishing the requirements for class certification and granted the
plaintiffs' motion to certify the class. The Company is a party to two
consolidated 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 in early 1996. 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. The complaints filed do not
specify any amount of damages but do request for any unlawful conduct to be
enjoined and treble damages plus reimbursement for fees and costs.
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
NO. DESCRIPTION
- ------- ------------------------------------------------------------------
11 Statement re: Computation of Per Share Earnings
27 Financial Data Schedule
(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: October 22, 1997 By: /s/ David L. Kolb
--------------------------------------
DAVID L. KOLB, Chairman of the Board
and Chief Executive Officer
(principal executive officer)
Dated: October 22, 1997 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
NO. DESCRIPTION
- --- --------------------------------------------------------------
11 Statement re: Computation of Per Share Earnings
27 Financial Data Schedule
15
<PAGE>
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 27, September 28, September 27, September 28,
1997 1996 1997 1996
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net earnings $20,853 14,800 48,707 36,533
======= ======= ======= =======
Weighted average common and common
equivalent shares outstanding:
Weighted average common shares outstanding 34,623 34,392 34,560 34,074
Add weighted average common equivalent
shares - options to purchase common shares, net 346 431 317 405
------- ------- ------- -------
Weighted average common and common
equivalent shares outstanding 34,969 34,823 34,877 34,479
======= ======= ======= =======
Earnings per common and common
equivalent share $ 0.60 0.43 1.40 1.06
======= ======= ======= =======
</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 27, 1997.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-27-1997
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 290,744
<ALLOWANCES> 36,938
<INVENTORY> 316,344
<CURRENT-ASSETS> 596,059
<PP&E> 569,833
<DEPRECIATION> 247,402
<TOTAL-ASSETS> 992,764
<CURRENT-LIABILITIES> 276,992
<BONDS> 302,916
0
0
<COMMON> 347
<OTHER-SE> 384,599
<TOTAL-LIABILITY-AND-EQUITY> 992,764
<SALES> 1,385,234
<TOTAL-REVENUES> 1,385,234
<CGS> 1,067,999
<TOTAL-COSTS> 1,067,999
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 5,584
<INTEREST-EXPENSE> 21,543
<INCOME-PRETAX> 80,508
<INCOME-TAX> 31,801
<INCOME-CONTINUING> 48,707
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 48,707
<EPS-PRIMARY> 1.40
<EPS-DILUTED> 1.40
</TABLE>
