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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Act of 1934
Date of Report (Date of earliest event reported): November 12, 1998
MOHAWK INDUSTRIES, INC.
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(Exact name of registrant as specified in its charter)
Delaware 01-19826 52-1604305
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(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification No.)
incorporation)
160 South Industrial Blvd., Calhoun, Georgia 30701
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(Address, including zip code, of principal executive offices)
(706) 629-7721
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(Registrant's telephone number, including area code)
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Item 5. Other Events
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On November 12, 1998, Mohawk Industries, Inc. ("Mohawk") issued a
press release announcing an agreement to acquire Image Industries, Inc. and
closing of the acquisition of World Carpets, Inc. A copy of such press release
is included as an exhibit to this report and incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
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C. Exhibits
99.1 Press Release dated November 12, 1998
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SIGNATURE
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 hereunto duly authorized.
Mohawk Industries, Inc.
Date: November 13, 1998 By: /s/ Frank H. Boykin
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Frank H. Boykin
Corporate Controller
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INDEX TO EXHIBITS
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Exhibit
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99.1 Press Release dated November 12, 1998
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EXHIBIT 99.1
Mohawk Industries, Inc.
Press Release
NEWS RELEASE [LOGO OF MOHAWK APPEARS HERE]
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POST OFFICE BOX 12069
SOUTH INDUSTRIAL BLVD.
CALHOUN, GA 30703
(706) 629-7721
FOR RELEASE: IMMEDIATELY
CONTACT: JOHN D. SWIFT, CHIEF FINANCIAL OFFICER
MOHAWK INDUSTRIES, INC. ANNOUNCES AGREEMENT TO ACQUIRE IMAGE
INDUSTRIES, INC. AND CLOSING OF THE ACQUISITION OF WORLD CARPETS, INC.
CALHOUN, GEORGIA, NOVEMBER 12, 1998 - MOHAWK INDUSTRIES, INC. (NYSE: MHK) TODAY
ANNOUNCED THAT IT HAS REACHED AGREEMENT WITH THE MAXIM GROUP, INC. TO ACQUIRE
CERTAIN ASSETS AND ASSUME CERTAIN OBLIGATIONS AND LIABILITIES OF IMAGE
INDUSTRIES, INC., ITS WHOLLY-OWNED SUBSIDIARY. UNDER THE AGREEMENT, MOHAWK WILL
PAY APPROXIMATELY $210 MILLION IN CASH (DEBT-FREE) FOR CERTAIN ASSETS AND WILL
ASSUME CERTAIN OBLIGATIONS AND LIABILITIES OF IMAGE. THE ACQUISITION IS SUBJECT
TO THE EXPIRATION OF THE WAITING PERIOD UNDER THE HART-SCOTT-RODINO ACT AND
CERTAIN OTHER CUSTOMARY CONDITIONS BUT IS EXPECTED TO CLOSE DURING THE FIRST
QUARTER 1999.
IMAGE IS A LEADING PLASTIC RECYCLER AND CARPET MANUFACTURER WITH ANNUAL SALES OF
APPROXIMATELY $190 MILLION. IMAGE PRIMARILY MANUFACTURES POLYESTER RESIDENTIAL
CARPET AND HAS VERTICALLY INTEGRATED ITS MANUFACTURING PROCESS INTO THE
EXTRUSION OF POLYESTER FIBER FROM DISCARDED PLASTIC SODA BOTTLES AND OTHER
SOURCES OF POST-CONSUMER PLASTICS.
IN ADDITION, MOHAWK ANNOUNCED TODAY THAT IT CLOSED THE PREVIOUSLY ANNOUNCED
ACQUISITION OF WORLD CARPETS, INC. MOHAWK EXCHANGED APPROXIMATELY 4.9 MILLION
SHARES OF ITS COMMON STOCK IN EXCHANGE FOR ALL OF THE OUTSTANDING SHARES OF
WORLD CAPITAL STOCK. WORLD HAS ANNUAL SALES OF APPROXIMATELY $430 MILLION FROM
ITS VARIOUS PRODUCT LINES.
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COMMENTING ON THESE ACQUISITIONS, DAVID L. KOLB, CHAIRMAN AND CHIEF EXECUTIVE
OFFICER OF MOHAWK STATED, "THE ACQUISITION OF IMAGE WILL MAKE MOHAWK ONE OF THE
TOP MANUFACTURERS OF POLYESTER RESIDENTIAL CARPET WITH STATE-OF-THE ART
RECYCLING AND PRODUCTION TECHNOLOGY FILLING A MARKET NICHE IN WHICH MOHAWK DOES
NOT CURRENTLY HAVE A STRONG PRESENCE. THE IMAGE ACQUISITION IS EXPECTED TO BE
ACCRETIVE TO MOHAWK'S EARNINGS IMMEDIATELY AFTER CLOSING. IN ADDITION TO
PROVIDING A LOW COST POSITION IN SYNTHETIC STAPLE YARN PRODUCTS, THE IMAGE
ACQUISITION WILL PROVIDE OPPORTUNITIES FOR FURTHER SAVINGS DURING 1999 WHEN YARN
SPINNING AND HEAT SETTING OPERATIONS CURRENTLY PERFORMED BY THIRD PARTY
CONTRACTORS FOR IMAGE IS TRANSFERRED TO MOHAWK'S EXISTING UNUSED INTERNAL
CAPACITY. FINALLY, WE EXPECT FURTHER GROWTH IN IMAGE'S POLYESTER PRODUCTS FROM
PROGRAMS PUT IN PLACE BY MAXIM EARLIER IN 1998 TO FILL THE POLYESTER CARPET
NEEDS OF ITS RECENTLY ACQUIRED RETAIL STORE CHAINS.
WE CONTINUE TO BE VERY EXCITED ABOUT THE PROSPECTS FROM THE ACQUISITION OF WORLD
WHICH IS EXPECTED TO BE ACCRETIVE TO OUR EARNINGS IN 1999. THE WORLD
ACQUISITION WILL ALLOW FOR BETTER SELECTION OF PRODUCTS, GREATER ECONOMIES OF
SCALE AND MORE EFFICIENT DISTRIBUTION METHODS. BOTH OF THESE ACQUISITIONS WILL
ENHANCE OUR POSITION AS A LOW COST LEADER IN THE INDUSTRY AND PROVIDE ADDITIONAL
MARKETING AND SALES OPPORTUNITIES FOR MOHAWK. WE BELIEVE THESE ACQUISITIONS
WILL ADD INCREASED VALUE FOR OUR INVESTORS AND A BROADER PRODUCT SELECTION FOR
OUR CUSTOMERS."
CERTAIN OF THE STATEMENTS IN THE IMMEDIATELY PRECEDING PARAGRAPHS REGARDING THE
IMAGE AND WORLD ACQUISITIONS MAY CONSTITUTE "FORWARD-LOOKING STATEMENTS" WITHIN
THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1993, AS AMENDED, AND
SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, AND ARE SUBJECT
TO THE SAFE HARBOR PROVISIONS THEREOF. THOSE STATEMENTS ARE BASED ON
ASSUMPTIONS REGARDING THE COMPANY'S ABILITY TO SUCCESSFULLY INTEGRATE IMAGE AND
WORLD. THESE OR OTHER ASSUMPTIONS COULD PROVE INACCURATE AND THEREFORE, THERE
CAN BE NO ASSURANCE THAT THE "FORWARD-LOOKING STATEMENTS" WILL PROVE TO BE
ACCURATE.
MOHAWK IS A LEADING PRODUCER OF WOVEN AND TUFTED BROADLOOM CARPET AND RUGS FOR
RESIDENTIAL AND COMMERCIAL APPLICATIONS. THE COMPANY DESIGNS, MANUFACTURES AND
MARKETS CARPET IN A BROAD RANGE OF COLORS, TEXTURES AND PATTERNS AND IS WIDELY
RECOGNIZED THROUGH ITS PREMIER BRAND NAMES, SOME OF WHICH INCLUDE "ALADDIN,"
"ALEXANDER SMITH," "BIGELOW," "GALAXY," "HARBINGER," "HELIOS," "HORIZON,"
"KARASTAN," "MOHAWK," "MOHAWK COMMERCIAL" AND "WORLD." MOHAWK OFFERS A BROAD
LINE OF WASHABLE ACCENT AND BATH RUGS THROUGH ALADDIN AND NEWMARK & JAMES; AREA
RUGS THROUGH KARASTAN, AMERICAN RUG CRAFTSMEN AND AMERICAN WEAVERS; AND
DECORATIVE THROWS, PLACEMATS, TABLE RUNNERS AND KITCHEN CHAIR PADS THROUGH
AMERICAN WEAVERS. MOHAWK ALSO OFFERS A COMPLETE LAMINATE PRODUCT LINE UNDER THE
INSIGNIA BRAND NAME AND DISTRIBUTES CARPET PADDING AND CERAMIC TILE. THE
COMPANY MARKETS ITS PRODUCTS PRIMARILY THROUGH RETAILERS AND COMMERCIAL DEALERS.
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