<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): October 21, 1999
MOHAWK INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 01-19826 52-1604305
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(State or other (Commission File (IRS Employer
Jurisdiction of Number) 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 October 21, 1999, Mohawk Industries, Inc. ("Mohawk") issued a press
release announcing third quarter earnings. 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 October 21, 1999
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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: October 21, 1999 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 October 21, 1999
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NEWS RELEASE [MOHAWK LOGO 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 RECORD
THIRD QUARTER AND FIRST NINE MONTHS RESULTS
Calhoun, Georgia, October 21, 1999 -- Mohawk Industries, Inc. (NYSE:MHK) today
announced its highest quarterly earnings per share attained by the Company since
its stock first publicly traded in 1992. Net earnings for the quarter ended
October 2, 1999 increased 22% to $45,079,000, ($0.74 diluted earnings per share)
compared to $37,060,000 ($0.61 diluted earnings per share) for the third quarter
of 1998. This improvement in net earnings was the result of higher sales,
stronger gross profit and lower selling, general and administrative expenses as
a percentage of sales. Net sales for the quarter increased 13% to $809,933,000
compared to $718,772,000 for the third quarter 1998. The sales increase was
attributable to internal growth and the impact of the 1999 acquisition of
Image Industries.
Net earnings for the first nine months of 1999 were the highest first nine
months earnings in the Company's history with net earnings of $117,064,000 or
$1.91 diluted earnings per share. This is a 30% increase over the first nine
months of 1998 net earnings of $90,142,000 or $1.48 diluted earnings per share.
This improvement in net earnings was attributable to increased sales and
stronger gross profit. Net sales for the first nine months of 1999 were
$2,307,717,000 representing a 16% increase from the first nine months 1998 sales
of $1,997,733,000. This increase was primarily due to the impact of 1998 and
1999 acquisitions, internal growth and four additional business days in the
first quarter of 1999.
In commenting on the third quarter performance, David L. Kolb, Chairman and CEO,
stated, "This quarter was another record period that included strong sales and
improved operating margins for our Company. Mohawk's residential flooring
products, including broadloom carpet and rugs, provided the sales growth for the
quarter. Shipments for the commercial industry continue to be soft just as our
commercial flooring products have shown weakness this quarter, but we are
encouraged by some areas of the commercial business. The realignments of our
various operations to efficiently integrate the recent acquisitions into our
manufacturing, sales, marketing, and administrative efforts are progressing
effectively. Our goal is to integrate the acquisitions on an orderly basis so
as to maximize returns to the Company while minimizing the disruption to
operations. All of our recent acquisitions continue to contribute positively to
our earnings and we believe the Company will see continued benefits in improved
operating earnings in future periods.
As announced earlier in the third quarter we completed the acquisitions of
two yarn processing facilities that will allow us to reduce our yarn processing
costs and supply additional capacity for future growth. Both of these
acquisitions were fully integrated into our Company at the end of the
third quarter.
In addition to the solid financial results for the quarter, we are pleased to
inform our investors of some other very positive items for our Company:
1. Mohawk received in October the Home Depot 1999 Partner of the Year
Award for floor covering for consistent high level of service over the
past year.
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2. Patricia Durkan, President of Mohawk Hospitality Carpets, was selected
1999 Woman of the Year by the Network of Executive Women in Hospitality
(NEWH). In addition, Mohawk's Merit and Durkan divisions received the
top two awards for excellence in floorcovering design at the Hospitality
Design '99 Show. This show included products from more than 20 top
international manufacturers of hospitality floorcoverings.
3. Standard & Poor's upgraded our corporate credit rating in September
to BBB.
4. Our previously announced stock repurchase program is progressing with
over 3.0 million shares having been purchased through October 20, 1999."
Certain of the statements in the immediately preceding paragraphs, particularly
anticipating future financial performance, business prospects, growth and
operating strategies, proposed acquisitions, new products and similar matters,
and those preceded by, followed by or that otherwise include the words
"believes," "expects," "anticipates," "intends," "estimates," or similar
expressions constitute "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended. 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. Those
statements are based on assumptions regarding the Company's ability to
successfully integrate the yarn processing facilities and its other recent
acquisitions, to achieve strong returns on its investments in Image and 1999
capital expenditures and the success of the stock buy-back program. These or
other assumptions could prove inaccurate and therefore, there can be no
assurance that the "forward-looking statements" will prove to be accurate.
Forward-looking statements involve a number of risks and uncertainties. The
following important factors affect the future results of Mohawk and could cause
those results to differ materially from those expressed in the forward-looking
statements: materially adverse changes in economic conditions generally in the
carpet, rug and floorcovering markets served by Mohawk; competition from other
carpet, rug and floorcovering manufacturers, raw material prices, timing and
level of capital expenditures, the successful integration of acquisitions
including the challenges inherent in diverting Mohawk's management attention and
resources from other strategic matters and from operational matters for an
extended period of time, the successful introduction of new products, the
successful rationalization of existing operations, and other risks identified
from time to time in the Company's SEC reports and public announcements.
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 "Mohawk,"
"Aladdin," "Alexander Smith," "Bigelow," "Durkan," "Galaxy," "Harbinger,"
"Helios," "Horizon," "Image," "Karastan," "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.
#####
There will be a conference call Friday, October 22, 1999
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at 11:00 AM Eastern Time
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The telephone number to call is 1-800-603-9255.
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MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
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Consolidated Statement of Earnings Data October 2, September 26, October 2, September 26,
(Amounts in thousands. except per share data) 1999 1998(1) 1999 1998(1)
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<S> <C> <C> <C> <C>
Net sales $809,933 718,772 2,307,717 1,997,733
Cost of Sales 606,687 541,010 1,725,231 1,505,976
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Gross profit 203,246 177,762 592,486 491,757
Selling, general and administrative expenses 119,258 108,279 361,920 316,102
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Operating income 83,988 69,483 220,566 175,655
Interest expense 8,335 7,245 23,942 23,336
Other expense, net 1,142 805 3,130 1,624
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Earnings before income taxes 74,511 61,433 193,494 150,695
Income taxes 29,432 24,373 76,430 60,553
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Net earnings $ 45,079 37,060 117,064 90,142
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Basic earnings per share $ 0.74 0.61 1.93 1.49
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Weighted-average common shares outstanding 60,600 60,435 60,586 60,359
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Diluted earnings per share $ 0.74 0.61 1.91 1.48
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Weighted-average common and dilutive potential common
shares outstanding 61,114 61,169 61,218 61,107
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Consolidated Balance Sheet Data
(Amounts in thousands)
October 2, September 26,
1999 1998(1)
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ASSETS
Current assets:
Cash $ - 72
Receivables 385,344 371,367
Inventories 537,579 443,107
Prepaid expenses 13,444 7,873
Deferred income taxes 52,568 37,576
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Total current assets 988,935 859,995
Property, plant and equipment, net 619,993 446,662
Other assets 107,310 99,479
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$1,716,238 1,406,136
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 197,013 40,262
Accounts payable and accrued expenses 401,869 384,279
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Total current liabilities 598,882 424,541
Long-term debt, less current portion 363,252 360,216
Deferred income taxes and other long-term liabilities 31,889 36,541
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Total liabilities 994,023 821,298
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Total stockholders' equity 722,215 584,838
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$1,716,238 1,406,136
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</TABLE>
(1) Restated to give retroactive effect to the merger with Durkan Patterned
Carpets, Inc which was accounted for under the pooling of interests method of
accounting and certain prior year financial balances have been reclassified to
conform with the current year's presentation.
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Dates for Future Press Releases and Conference Calls:
Press Release Conference Call
3rd Qtr. 1999 October 21 October 22 11:00 a.m. (800-603-9255)
4th Qtr. 1999 February 10 February 11 11:00 a.m. "
1st Qtr. 2000 April 24 April 25 11.00 a.m. "
2nd Qtr. 2000 July 20 July 21 11:00 a.m. "
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