<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 July 3, 1999
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)
<TABLE>
<S> <C>
Delaware 52-1604305
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
Post Office Box 12069, 160 South Industrial Boulevard, Calhoun, Georgia 30703
(Address of principal executive offices) (Zip Code)
</TABLE>
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
August 6, 1999, the latest practicable date, is as follows: 60,614,156 shares of
Common Stock, $.01 par value.
<PAGE>
MOHAWK INDUSTRIES, INC.
INDEX
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
Part I. Financial Information:
Item 1. Financial Statements
Condensed Consolidated Balance Sheets -
July 3, 1999 and December 31, 1998 3
Condensed Consolidated Statements of Earnings -
Three months ended July 3, 1999 and June 27, 1998 5
Six months ended July 3, 1999 and June 27, 1998 6
Condensed Consolidated Statements of Cash Flows -
Six months ended July 3, 1999 and June 27, 1998 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 13
Part II. Other Information 13
</TABLE>
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
July 3, 1999 December 31, 1998
-------------- -------------------
<S> <C> <C>
Current assets:
Cash $ - 2,384
Receivables 372,670 331,574
Inventories 528,555 423,837
Prepaid expenses 10,973 21,605
Deferred income taxes 52,304 52,304
----------- -----------
Total current assets 964,502 831,704
----------- -----------
Property, plant and equipment, at cost 1,070,245 883,942
Less accumulated depreciation and
amortization 464,678 429,045
----------- -----------
Net property, plant and equipment 605,567 454,897
----------- -----------
Other assets 108,725 102,341
----------- -----------
Total assets $ 1,678,794 1,388,942
=========== ===========
</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>
July 3, 1999 December 31, 1998
-------------- -------------------
<S> <C> <C>
Current liabilities:
Current portion of long-term debt $ 197,038 44,424
Accounts payable and accrued expenses 393,190 364,369
----------- -----------
Total current liabilities 590,228 408,793
Deferred income taxes 31,025 31,045
Long-term debt 365,979 332,665
Other long-term liabilities 869 5,380
----------- -----------
Total liabilities 988,101 777,883
----------- -----------
Stockholders' equity:
Preferred stock, $.01 par value; 60 shares
authorized; no shares issued
- -
Common stock, $.01 par value; 150,000 shares
authorized; 60,608 and 60,533 shares issued
in 1999 and 1998, respectively 606 606
Additional paid-in capital 179,409 172,045
Retained earnings 510,678 438,408
----------- -----------
Total stockholders' equity 690,693 611,059
----------- -----------
Total liabilities and stockholders' equity $ 1,678,794 1,388,942
=========== ===========
</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
------------------------------
July 3,1999 June 27, 1998
----------- -------------
<S> <C> <C>
Net sales $ 790,784 689,369
Cost of sales 588,532 511,436
----------- -------------
Gross profit 202,252 177,933
Selling, general and administrative expenses 121,392 110,040
----------- -------------
Operating income 80,860 67,893
----------- -------------
Other expense:
Interest expense 7,753 8,101
Other expense, net 226 875
----------- -------------
7,979 8,976
----------- -------------
Earnings before income taxes 72,881 58,917
Income taxes 28,788 22,970
----------- -------------
Net earnings $ 44,093 35,947
=========== =============
Basic earnings per share $ 0.73 0.60
=========== =============
Weighted-average common shares outstanding 60,593 60,377
=========== =============
Diluted earnings per share $ 0.72 0.59
=========== =============
Weighted-average common and dilutive potential
common shares outstanding 61,257 61,174
=========== =============
</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>
Six Months Ended
------------------------------
July 3,1999 June 27, 1998
----------- -------------
<S> <C> <C>
Net sales $ 1,499,417 1,278,890
Cost of sales 1,117,457 964,214
----------- -------------
Gross profit 381,960 314,676
Selling, general and administrative expenses 245,489 208,504
----------- -------------
Operating income 136,471 106,172
----------- -------------
Other expense:
Interest expense 15,605 16,091
Other expense, net 1,883 819
----------- -------------
17,488 16,910
----------- -------------
Earnings before income taxes 118,983 89,262
Income taxes 46,998 36,180
----------- -------------
Net earnings $ 71,985 53,082
=========== =============
Basic earnings per share $ 1.19 0.88
=========== =============
Weighted-average common shares outstanding 60,579 60,322
=========== =============
Diluted earnings per share $ 1.17 0.87
=========== =============
Weighted-average common and dilutive potential
common shares outstanding 61,271 61,076
=========== =============
</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>
Six Months Ended
--------------------------------
July 3, 1999 June 27, 1998
------------ -------------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 71,985 53,082
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization 51,253 39,659
Deferred taxes - 3,487
Provision for doubtful accounts 7,500 5,383
Loss on sale of property, plant and equipment 3,095 -
Changes in operating assets and liabilities
net of effects of acquisitions:
Receivables (25,009) (43,268)
Inventories (67,460) (40,892)
Accounts payable and accrued expenses (10,272) 58,003
Other assets and prepaid expenses 13,143 9,640
Other liabilities (4,531) (867)
------------ -------------
Net cash provided by operating activities 39,704 84,227
------------ -------------
Cash flows used in investing activities:
Additions to property, plant and equipment, net (74,469) (38,411)
Acquisitions (158,786) 25
------------ -------------
Net cash used in investing activities (233,255) (38,386)
------------ -------------
Cash flows from financing activities:
Net change in revolving line of credit 190,461 (51,919)
Payments on term loans - (4,970)
Redemption of acquisition indebtedness (20,917) -
(Redemption)/Proceeds of IRBs and other, net of proceeds (7,987) 5,288
Change in outstanding checks in excess of cash 21,961 2,924
Common stock transactions 7,649 2,781
------------ -------------
Net cash provided by (used in) financing activities 191,167 (45,896)
------------ -------------
Net change in cash (2,384) (55)
Cash, beginning of period 2,384 200
------------ -------------
Cash, end of period $ - 145
============ =============
Net cash paid during the period for:
Interest $ 18,698 15,765
============ =============
Income taxes $ 54,255 25,663
============ =============
</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 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 1998 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, 1998.
The Company's basic earnings per share are computed by dividing net earnings by
the weighted-average common shares outstanding, and diluted earnings per share
are computed by dividing net earnings by the weighted-average common and
dilutive potential common shares outstanding. Dilutive common stock options are
included in the diluted earnings per share calculation using the treasury stock
method.
2. Acquisitions
On January 29, 1999, the Company acquired certain assets of Image Industries,
Inc. ("Image") for approximately $193,000, including acquisition costs and the
assumption of $30,000 of tax exempt debt. The Image acquisition has been
accounted for under the purchase method of accounting and, accordingly, the
purchase price was allocated to the assets acquired and liabilities assumed
based on the estimated fair values at the date of acquisition. The estimated
fair values were $201,689 for assets acquired and $42,903 for the liabilities
assumed.
The operating results of Image are included in the Company's 1999 consolidated
statement of earnings from the date of acquisition. The following unaudited pro
forma information presents a summary of consolidated results of operations of
the Company and Image as if the acquisition had occurred at the beginning of
1998.
Six Months Ended
------------------------------
July 3, 1999 June 27,1998
------------ ------------
Net sales $ 1,515,266 1,375,789
Net earnings $ 71,623 54,698
Basic earnings per share $ 1.18 0.91
Diluted earnings per share $ 1.17 0.90
On March 9, 1999, the Company acquired all the outstanding capital stock of
Durkan Patterned Carpets, Inc. ("Durkan") for approximately 3,150 shares of the
Company's common stock valued at $116,500 based on the closing stock price the
day the letter of intent was executed. The Durkan acquisition has been accounted
for using the pooling-of-interests method of accounting and, accordingly, the
Company's historical consolidated financial statements have been restated to
include the accounts and results of operations of Durkan.
8
<PAGE>
MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
(In thousands)
(Unaudited)
3. Receivables
Receivables are as follows:
<TABLE>
<CAPTION>
July 3, 1999 December 31, 1998
------------- -----------------
<S> <C> <C>
Customers, trade $ 431,402 385,768
Other 2,897 3,687
------------- -----------------
434,299 389,455
Less allowance for discounts, returns, claims
and doubtful accounts 61,629 57,881
------------- -----------------
Net receivables $ 372,670 331,574
============= =================
</TABLE>
4. Inventories
The components of inventories are as follows:
<TABLE>
<CAPTION>
July 3, 1999 December 31, 1998
------------- -----------------
<S> <C> <C>
Finished goods $ 269,581 219,776
Work in process 73,818 60,266
Raw materials 185,156 143,795
------------- -----------------
Total inventories $ 528,555 423,837
============= =================
</TABLE>
5. Other assets
Other assets are as follows:
<TABLE>
<CAPTION>
July 3, 1999 December 31, 1998
------------- -----------------
<S> <C> <C>
Goodwill, net of accumulated amortization of
$11,709 and $10,363, respectively $ 96,685 85,972
Other assets 12,040 16,369
------------- -----------------
Total other assets $ 108,725 102,341
============= =================
</TABLE>
9
<PAGE>
MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
(In thousands)
(Unaudited)
6. Accounts payable and accrued expenses
Accounts payable and accrued expenses are as follows:
<TABLE>
<CAPTION>
July 3, 1999 December 31, 1998
------------ -----------------
<S> <C> <C>
Outstanding checks in excess of cash $ 48,855 26,894
Accounts payable, trade 177,950 158,929
Accrued expenses 121,026 126,702
Accrued compensation 45,359 51,844
------------- ----------
Total accounts payable and accrued expenses $ 393,190 364,369
============= ==========
</TABLE>
10
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
On January 29, 1999, the Company acquired certain assets of Image
Industries, Inc. ("Image") for approximately $193 million, including acquisition
costs and the assumption of $30 million of tax exempt debt. The Image
acquisition has been accounted for under the purchase method of accounting.
On March 9, 1999, the Company acquired all of the outstanding capital stock
of Durkan Patterned Carpets, Inc. ("Durkan") for approximately 3.1 million
shares of the Company's common stock valued at $116.5 million based on the
closing stock price the day the letter of intent was executed. The Durkan
acquisition has been accounted for using the pooling of interests method of
accounting and, accordingly, the Company's historical consolidated financial
statements have been restated to include the accounts and results of operations
of Durkan.
These acquisitions have created opportunities to enhance Mohawk's
operations by (i) broadening price points, (ii) increasing vertical integration
efforts, (iii) expanding distribution capabilities and (iv) facilitating entry
into niche businesses.
Through the Company's restructuring efforts over the past three years, new
information technology systems have been installed throughout all of the
organization, most of which are Year 2000 compliant. In addition, the Company
has concluded identification of all other significant information technology
systems that are not Year 2000 compliant. The Company has completed its review
of equipment and software with the respective vendors from whom the equipment
and software was purchased to address any noncompliance issues. The Company has
identified certain Year 2000 issues with respect to its business systems. The
Company has formed a committee of employees familiar with its information
technology systems to assess and prioritize the need to act, on the basis of
each system's importance, to ensure that its business systems will be made Year
2000 compliant. The Company has also completed a review of all process control
systems, both proprietary and non-proprietary. This review revealed that certain
Year 2000 issues exist. Although the Company can provide no assurances, it
estimates that it will cost no more than $250,000 of incremental costs to make
its business systems Year 2000 compliant. These upgrades have been substantially
completed, and the upgrades that are still in process are expected to be
completed in the third quarter of 1999. Testing of these upgrades is underway
and will be completed in the third quarter of 1999.
The Company has completed the review of its top suppliers and customers to
determine its progress in becoming Year 2000 compliant. The review indicated
that all of its major suppliers and customers appear to be in the process of
resolving any of their Year 2000 compliance issues and that they do not foresee
any material problems. The Company continues to follow-up with all of its
suppliers and customers to insure that all potential problems, including those
of its individual plant locations and local suppliers, are managed correctly.
If the Company cannot successfully and timely resolve its Year 2000 issues,
its business, results of operations and financial condition could be materially
adversely affected. The Company has not developed a contingency plan in the
event of a Year 2000 problem, however, based upon the results of its internal
review, the Company does not believe a contingency plan is necessary. The
Company will, however, continue to evaluate the need for a contingency plan.
Results of Operations
Quarter Ended July 3, 1999 As Compared With Quarter Ended June 27, 1998
- -----------------------------------------------------------------------
Net sales for the quarter ended July 3, 1999 were $790.8 million, which
represented an increase of 15% from the $689.4 million reported for the second
quarter of 1998. The Company believes the second quarter 1999 net sales increase
was attributable to internal growth and the impact of 1998 and 1999
acquisitions.
Gross profit for the second quarter of the current year was $202.3 million
(25.6% of net sales). In the second quarter of 1998 gross profit was $177.9
million (25.8% of net sales).
Selling, general and administrative expenses for the current quarter were
$121.4 million (15.4% of net sales) compared to $110 million (16% of net sales)
for the prior year's second period. The decrease was primarily due to better
leveraging of these expenses against a higher sales volume in 1999.
Interest expense for the current period was $7.8 million compared to $8.1
million in the second quarter of 1998. The primary factor for the decrease was a
decrease in the borrowing rate in the second quarter compared to the second
quarter of 1998.
In the current period, income tax expense was $28.8 million, or 39.5% of
earnings before income taxes, compared to $23.0 million, or 39.0% of earnings
before income taxes, in the second quarter of 1998. The lower income tax rate in
1998 is due to the impact of prior-year restatements related to the acquisitions
of World Carpets, Inc. ("World") and Durkan.
11
<PAGE>
Six Months Ended July 3, 1999 As Compared With Six Months Ended June 27, 1998
- -----------------------------------------------------------------------------
Net sales for the first six months ended July 3, 1999 were $1,499.4
million, which represented an increase of 17% from the $1,278.9 million reported
for the first six months of 1998. This sales increase was attributable to
favorable industry conditions and a gain in market share by the Company
resulting from continued emphasis on supporting its dealers and strong
acceptance of new products. Additionally, much of the sales increase can be
attributed to responsive customer service, leadership in product quality and
competitive pricing of products.
Gross profit for the first six months of the current year was $382 million
(25.5% of net sales). In the first six months of 1998, gross profit was $314.7
million (24.6% of net sales). Much of the increase in gross profit can be
attributed to favorable product mix, improved productivity, lower material costs
and better leveraging of expenses with higher sales volume. Many of these
improvements are primarily attributable to restructuring improvements the
Company has made since 1996.
Selling, general and administrative expenses for the current period were
$245.5 million (16.4% of net sales) compared to $208.5 million (16.3% of net
sales) for the prior year's first six months.
Interest expense for the current period was $15.6 million compared to $16.1
million in the prior year's first six months. The primary factor for the
decrease was a decrease in the borrowing rate in the current period compared to
the prior year's first six months.
In the current period, income tax expense was $47 million, or 39.5% of
earnings before income taxes, compared to $36.2 million, or 40.5% of earnings
before income taxes, in the prior year's first six months. The higher income tax
rate in 1998 is due to the impact of prior-year restatements related to the
acquisitions of World and Durkan.
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 $331.6 million at the
beginning of 1999 to $372.7 million at July 3, 1999. The $41.1 million increase
resulted primarily from seasonally higher sales volume in the second quarter as
compared to December and the acquisition of Image. Inventories rose from $423.8
million at the beginning of 1999 to $528.6 million at July 3, 1999, due to
requirements to meet seasonal customer demand and the acquisition of Image.
Capital expenditures totaled $233.3 million in the first half of 1999
(including amounts paid for the Image acquisition) 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 1999 is
expected to range from $71 million to $81 million, the majority of which will be
used to increase capacity and productivity.
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.
12
<PAGE>
Forward-Looking Information
Certain of the matters discussed in the preceding pages, particularly
regarding anticipating future financial performance, business prospects, growth
and operating strategies, proposed acquisitions, new products, Year 2000
compliance 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. Forward-looking statements involve a number of risks and uncertainties.
The following important factors, in addition to those discussed elsewhere in
this document, 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; failure of our vendors, customers
and suppliers to timely identify and adequately address Year 2000 compliance
issues; 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.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The Company's market risk-sensitive instruments do not subject the Company
to material market risk exposures.
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 contemplated to which the Company is a
party or to which any of its property is subject.
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 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 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. In October 1998, two plaintiffs, on behalf of
an alleged class of purchasers of nylon carpet products, filed a complaint in
the United States District Court for the Northern District of Georgia against
the Company and two of its subsidiaries as well as a competitor and one of its
subsidiaries. The complaint alleges that the Company acted in concert with other
carpet manufacturers to restrain competition in the sale of certain nylon carpet
products. The Company has filed an answer and denied the allegations in the
complaint and set forth its defenses. In February 1999, a similar complaint was
filed in the Superior Court of the State of California, City and County of San
Francisco, on behalf of a purported class based on indirect purchases of nylon
carpet in the State of California and alleges violations of California antitrust
and unfair competition laws. The complaints described above do not specify any
specific amount of damages but do request injunctive relief and treble damages
plus reimbursement for fees and costs. The Company believes it has meritorious
defenses and intends to vigorously defend against these actions.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
13
<PAGE>
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Stockholders was held on May 20, 1999, at which time
stockholders were asked to elect a class of directors to serve a three-year term
beginning in 1999.
Jeffrey S. Lorberbaum and Robert N. Pokelwaldt were elected as Class I
directors of the Company for a term expiring in 2002. Mr.Lorberbaum was elected
by stockholders owning 50,356,463 shares of common stock, with stockholders
owning 87,693 shares withholding authority. With respect to Mr. Lorberbaum's
election, there were no broker nonvotes. Mr. Pokelwaldt was elected by
stockholders owning 50,425,204 shares of common stock, with stockholders owning
18,952 shares withholding authority. With respect to Mr.Pokelwaldt's election,
there were no broker nonvotes. Messrs. Leo Benatar, Bruce C. Bruckmann, David L.
Kolb, Alan S. Lorberbaum and Larry W. McCurdy continued their terms of office as
directors.
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.
14
<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: August 10, 1999 By: /s/ David L. Kolb
-----------------
DAVID L. KOLB, Chairman of the Board and
Chief Executive Officer (principal
executive officer)
Dated: August 10, 1999 By: /s/ John D. Swift
-----------------
JOHN D. SWIFT, Chief Financial Officer,
Vice President-Finance and Assistant
Secretary
(principal financial and accounting
officer)
15
<PAGE>
EXHIBIT INDEX
No. Description
- --- -----------------------------
11 Statement re: Computation of Per Share Earnings
27 Financial Data Schedule
16
<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 FAS No. 128.
Three Months Ended
--------------------
July 3, June 27,
1999 1998
------- -------
Net earnings $44,093 35,947
======= ======
Weighted-average common and dilutive potential
common shares outstanding:
Weighted-average common shares outstanding 60,593 60,377
Add weighted-average dilutive potential common
shares - options to purchase common shares, net 664 797
------- -------
Weighted-average common and dilutive potential
common shares outstanding 61,257 61,174
======= =======
Basic earnings per share $ 0.73 0.60
======= =======
Diluted earnings per share $ 0.72 0.59
======= =======
Six Months Ended
--------------------
July 3, June 27,
1999 1998
------- -------
Net earnings $71,985 53,082
======= =======
Weighted-average common and dilutive potential
common shares outstanding:
Weighted-average common shares outstanding 60,579 60,322
Add weighted-average dilutive potential common
shares - options to purchase common shares, net 692 754
------- -------
Weighted-average common and dilutive potential
common shares outstanding 61,271 61,076
======= =======
Basic earnings per share $ 1.19 0.88
======= =======
Diluted earnings per share $ 1.17 0.87
======= =======
17
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM MOHAWK
INDUSTRIES, INC.'S A QUARTERLY REPORT TO STOCKHOLDERS FOR THE QUARTER ENDED JULY
3, 1999.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUL-03-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 434,299
<ALLOWANCES> 61,629
<INVENTORY> 528,555
<CURRENT-ASSETS> 964,502
<PP&E> 1,070,245
<DEPRECIATION> 464,678
<TOTAL-ASSETS> 1,678,794
<CURRENT-LIABILITIES> 590,228
<BONDS> 365,979
0
0
<COMMON> 606
<OTHER-SE> 690,087
<TOTAL-LIABILITY-AND-EQUITY> 1,678,794
<SALES> 1,499,417
<TOTAL-REVENUES> 1,499,417
<CGS> 1,117,457
<TOTAL-COSTS> 1,117,457
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 7,500
<INTEREST-EXPENSE> 15,605
<INCOME-PRETAX> 118,983
<INCOME-TAX> 46,998
<INCOME-CONTINUING> 71,985
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 71,985
<EPS-BASIC> 1.19
<EPS-DILUTED> 1.17
</TABLE>
