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EXHIBIT 99.1
For Release: Immediately
Contact: John D. Swift, Chief Financial Officer
MOHAWK INDUSTRIES, INC. BECOMES A NATIONAL DISTRIBUTOR
FOR CONGOLEUM CORPORATION
Calhoun, Georgia, September 25, 2000 - Mohawk Industries, Inc. (NYSE:MHK) today
has announced that it has been selected to become a national distributor of
Congoleum Corporation (AMEX: CGM) products throughout Continental United States
effective November 1, 2000.
Commenting on the selection of Mohawk, Jeffrey S. Lorberbaum, Chief Operating
Officer, stated, "We are very excited with the potential long term benefits of
this relationship to both companies. For Mohawk, this gives us a much stronger
position in the floorcovering industry with at complete line of soft and hard
surface floorcoverings for our customer. During 2000 and 2001 we will complete
the distribution of wood products throughout the U.S. and expand our ceramic
tile line from two regions to the remaining eight regions. To support Congoleum
and our other hard surface offerings, we have established a dedicated sales
force and technical personnel throughout the United States. Coupling these
products and this salesforce with our extensive distribution operations will
provide even better service to our customers. This will strengthen our position
with our customers throughout the United States."
During the next twelve months significant startup costs for vinyl, wood and
ceramics will be incurred to achieve a significant position in the hard surface
market. Payroll costs for over 200 new sales and technical personnel, additional
regional warehousing costs, sample expenses and other hard surface flooring
related costs and investments will be included in these startup costs. We
anticipate the growth in sales will lag the increase in costs. In addition, the
Company continues to experience increased oil-related costs such as raw
material, utility and fuel costs that have been difficult to recover or offset
on a timely basis. It appears that these higher costs and higher interest rates
are also having a dampening effect on the economy and floorcovering industry.
The overall impact due to a combination of the cost increases, slower sales
growth, recent price increases and higher productivity on Mohawk's operations
(excluding the one-time $7.0 million Anti-Trust litigation settlement cost) is
anticipated to result in the third quarter of 2000 earnings per share being
similar to the second quarter of 2000, but the fourth quarter of 2000 and first
quarter 2001 will incur a majority of the expenditures with limited sales growth
from the hard surface lines. Taking into consideration all the factors
influencing the business at this time, it is anticipated that the fourth quarter
earnings per share will be above last year but only by middle single digit
percentage growth. We believe additional hard surface costs will be incurred
after fourth quarter but it is difficult to anticipate the state of the economy,
the condition of oil-related and interest costs, and the potential sales growth
of theses new product lines.
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The long-term value of this relationship and these new products is extremely
important but does require some short-term expenditures. We believe this will
give us a distinct competitive advantage with our customers.
The earnings release for the third quarter will be issued on October 12, 2000,
after the close of the market. A conference call will be held on September 26,
2000 at 11:00 a.m. EST. Call (800) 603-9255 to participate.
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 achieve
forecasted operating results and its product lines. 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; oil price increases; 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 operation; and other risks
identified form 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," "Bigelow," "Custom Weave," "Durkan," "Galaxy," "Harbinger," "Helios,"
"Horizon," "Image," "Karastan," "Mohawk Commercial," "World," and "Wunda Weve."
Mohawk offers a broad line of area and washable rugs branded by Karastan,
Aladdin, Newmark & James and American Rug Craftsmen and decorative throw
blankets, placemats, pillows and chairpads branded by American Weavers. Mohawk
also offers a complete laminate product line and distributes carpet padding and
ceramic tile. The Company markets its products primarily through retailers and
dealers.
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Dates for Future Press releases and conference Calls:
Press Release Conference Call
3rd Quarter 2000 October 12 October 13 11:00 am (800-603-9255)
4th Quarter 2000 February 8 February 9 11:00 am "
1st Quarter 2001 April 12 April 13 11:00 am "
2nd Quarter 2001 July 12 July 13 11:00 am "
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