CALHOUN, Georgia, Feb. 9, 2017 /PRNewswire/ -- Mohawk
Industries, Inc. (NYSE: MHK) today announced 2016 fourth quarter
record net earnings of $234 million
and diluted earnings per share (EPS) of $3.13, a 22% increase versus prior year.
Excluding restructuring, acquisition expenses and other charges,
net earnings were $243 million, and
EPS was $3.26, a 16% increase over
last year's fourth quarter adjusted EPS. Net sales for the fourth
quarter of 2016 were $2.2 billion, up
9% versus the prior year's fourth quarter as reported and 7% on a
legacy basis applying constant days and currency rates. For the
fourth quarter of 2015, net sales were $2.0
billion, net earnings were $192
million and EPS was $2.57;
excluding restructuring, acquisition and other charges, net
earnings were $210 million and EPS
was $2.82.
For the twelve months ending December 31,
2016, net earnings and EPS were $930
million and $12.48,
respectively. Net earnings excluding restructuring, acquisition
expenses and other charges were $940
million, and EPS was $12.61,
an increase of 24% over the twelve-month period adjusted EPS result
in 2015. For the twelve-month period, net sales were $9.0 billion, an increase of 11% versus prior
year as reported and 5.5% on a legacy basis applying constant
currency rates. For the twelve-month period ending December 31, 2015, net sales were $8.1 billion, net earnings were $615 million and EPS was $8.31; excluding restructuring, acquisition
expenses and other charges, net earnings and EPS were $756 million and $10.20.
Commenting on Mohawk Industries' fourth quarter and full year
performance, Jeffrey S. Lorberbaum,
Chairman and CEO, stated, "In the fourth quarter, our sales and
earnings per share set records for the period. Our operating margin
for the quarter rose to 14.0%, a 150 basis point improvement over
the prior year and the highest fourth quarter result in the
company's history.
"For the full year, Mohawk delivered an outstanding performance.
Our revenues for the year rose to an all-time high, our EBITDA
increased to $1.7 billion and we
generated adjusted operating income of $1.3
billion, up 24% over the prior year, the highest in our
history. In 2016, our capital investments were our most ever at
approximately $670 million. In 2016
alone, process improvements from new methods, product
re-engineering and equipment upgrades have increased our
productivity by $140 million. To
continue our growth, we will make even greater internal investments
this year to expand capacity and enter new markets. We are also
adding unique capabilities to introduce more differentiated
products and anticipate even higher productivity improvements in
the coming year.
"For the quarter, our Global Ceramic Segment sales increased 5%
as reported and on a constant days and currency basis. Operating
income for the segment rose approximately 17% as reported to an
operating margin of 14%. Sales in our North American ceramic
business improved with new construction, commercial and home center
channels outperforming. Our new larger sizes, contemporary shapes
and proprietary Reveal Imaging are enhancing our styling and sales
growth. Our greenfield ceramic plant in Tennessee became fully operational in the
period and should reach planned efficiency levels in the first
quarter. We are introducing higher value products at the facility
to improve the product mix in the plant. In Mexico, our sales grew significantly but will
be constrained until our Salamanca
expansion is completed later this year. In the U.S. and
Mexico, we have announced price
increases on selected products to offset inflation in labor, energy
and materials. Our European ceramic sales and margins improved as
we enhanced our product offering and style leadership. In
Russia, we continue to outperform
the market as we bring leading global design to the region. We are
installing additional capacity to support the expected expansion of
the Russian economy.
"During the quarter, our Flooring North America Segment's sales
increased 10% as reported or 8.5% on a constant day's basis.
Operating income grew 18.5% to a margin of 14.5% as reported, or
15% excluding restructuring, integration and other charges.
Residential carpet sales improved despite decreased selling prices
from channel mix and growth in polyester. Our price increase of 3
to 5% to cover rising costs is being implemented in the first
quarter. We are introducing SmartStrand Silk Reserve, which
elevates luxuriously soft carpet to an unprecedented level, and
AirO, a patented recycled polyester technology that produces a
unique, more elegant soft flooring product that is installed in
half the time. During the period, our commercial business grew
faster than residential as a result of our investments in products
and sales last year. Our hard surface sales, including LVT,
laminate, wood and vinyl, continued their dramatic expansion. Our
LVT plant made significant improvements during the period, and we
are installing another production line that will double our U.S.
capacity by the end of this year. We are introducing SolidTech, a
new rigid product, to complement our existing flexible LVT
collections. Our premium laminate products with realistic visuals
and proprietary water resistance continue to outperform the market.
We are introducing more refined visuals and longer planks that
replicate solid wood from our new engineered wood plant.
"For the quarter, our Flooring Rest of the World Segment's sales
increased 14%, and operating income grew 41% as reported. Legacy
sales rose 7% on a constant currency basis, and adjusted operating
income increased 20% to a 17% margin. Our sales growth in the
period was led by LVT, laminate and insulation products. Both our
sheet vinyl and wood sales were hampered by prior manufacturing
disruptions, which we have overcome. Our segment margins increased
due to improved mix, the success of our new introductions and price
increases, which offset cost inflation and currency changes. To
maximize LVT production, we have implemented numerous operational
improvements that increased our throughput and reduced our
manufacturing costs. We continue to invest in sales and marketing
to expand the distribution of our LVT products in anticipation of
our capacity increasing this year. In laminate, we continue to grow
our sales and margins through design and performance innovation.
Sales of our insulation products increased significantly as we
realigned the management and sales strategies of our acquired and
legacy businesses. We are initiating the sale of carpet tile
products in Europe to establish
distribution that will support a new carpet tile plant that we are
building in Belgium this year. We
have approved a new sheet vinyl plant in Russia adjacent to our ceramic facility that
will be operational next year.
"In January, we entered into an agreement to acquire a ceramic
company in Italy located near our
existing facilities. We anticipate product, sales and manufacturing
synergies that will enhance our cost position and strengthen our
combined brands and distribution.
"Today, Mohawk is in the best position in the company's history.
In 2016, we delivered record results as our investment strategy to
enhance our product innovation, brands and service continued to
benefit our customers and provide the returns we expected. In 2017,
we anticipate sales to grow similarly to last year on a local basis
with operating margins improving slightly, excluding acquisitions
and intellectual property. This year we will absorb about
$45 million in start-up manufacturing
and related marketing expenses in addition to other cost inflation.
Across the enterprise, we are investing to increase our sales
growth by expanding our capacity, broadening our product portfolio
and entering new markets. Even with the considerable investments we
have made since 2013, our financial leverage is historically low at
1.4x EBITDA. We believe there are potential acquisitions in our
current markets and product categories as well as opportunities in
new geographies and complementary products. Our organization and
balance sheet can support significant additional investments to
increase our business and enhance shareholder value. Taking all of
this into account, our EPS guidance for the first quarter of 2017
is $2.64 to $2.73, which represents
an 11% to 15% increase over first quarter 2016."
ABOUT MOHAWK INDUSTRIES
Mohawk Industries is the leading global flooring manufacturer
that creates products to enhance residential and commercial spaces
around the world. Mohawk's vertically integrated manufacturing and
distribution processes provide competitive advantages in the
production of carpet, rugs, ceramic tile, laminate, wood, stone and
vinyl flooring. Our industry-leading innovation has yielded
products and technologies that differentiate our brands in the
marketplace and satisfy all remodeling and new construction
requirements. Our brands are among the most recognized in the
industry and include American Olean, Daltile, Durkan, IVC,
Karastan, Marazzi, Mohawk, Mohawk Group, Pergo, Quick-Step and
Unilin. During the past decade, Mohawk has transformed its business
from an American carpet manufacturer into the world's largest
flooring company with operations in Australia, Brazil, Canada, Europe, India, Malaysia, Mexico, New
Zealand, Russia and
the United States.
Certain of the statements in the immediately preceding
paragraphs, particularly anticipating future performance, business
prospects, growth and operating strategies and similar matters and
those that include the words "could," "should," "believes,"
"anticipates," "expects," and "estimates," or similar expressions
constitute "forward-looking statements." 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. There can be no assurance that the
forward-looking statements will be accurate because they are based
on many assumptions, which involve risks and uncertainties. The
following important factors could cause future results to differ:
changes in economic or industry conditions; competition; inflation
and deflation in raw material prices and other input costs;
inflation and deflation in consumer markets; energy costs and
supply; timing and level of capital expenditures; timing and
implementation of price increases for the Company's products;
impairment charges; integration of acquisitions; international
operations; introduction of new products; rationalization of
operations; tax, product and other claims; litigation; and other
risks identified in Mohawk's SEC reports and public
announcements.
Conference call Friday, February 10,
2017, at 11:00 AM Eastern
Time
The telephone number is 1-800-603-9255 for US/Canada and 1-706-634-2294 for
International/Local. Conference ID # 50983195. A replay will be
available until Friday, March 10,
2017, by dialing 855-859-2056 for US/local calls and
404-537-3406 for International/Local calls and entering Conference
ID # 50983195.
MOHAWK INDUSTRIES,
INC. AND SUBSIDIARIES
|
(Unaudited)
|
Consolidated
Statement of Operations
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
(Amounts in
thousands, except per share data)
|
|
December 31,
2016
|
|
December 31,
2015
|
|
December 31,
2016
|
|
December 31,
2015
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
2,182,566
|
|
1,997,997
|
|
8,959,087
|
|
8,071,563
|
Cost of
sales
|
|
1,491,567
|
|
1,375,787
|
|
6,146,262
|
|
5,660,877
|
Gross profit
|
|
690,999
|
|
622,210
|
|
2,812,825
|
|
2,410,686
|
Selling, general and
administrative expenses
|
|
385,727
|
|
372,968
|
|
1,532,882
|
|
1,573,120
|
Operating
income
|
|
305,272
|
|
249,242
|
|
1,279,943
|
|
837,566
|
Interest
expense
|
|
8,485
|
|
18,480
|
|
40,547
|
|
71,086
|
Other expense
(income), net
|
|
(3,190)
|
|
11,525
|
|
(1,729)
|
|
17,619
|
Earnings before income taxes
|
|
299,977
|
|
219,237
|
|
1,241,125
|
|
748,861
|
Income tax
expense
|
|
65,469
|
|
27,232
|
|
307,559
|
|
131,875
|
Net
earnings including noncontrolling interest
|
|
234,508
|
|
192,005
|
|
933,566
|
|
616,986
|
Net earnings
attributable to noncontrolling interest
|
|
760
|
|
446
|
|
3,204
|
|
1,684
|
Net earnings
attributable to Mohawk Industries, Inc.
|
|
$
233,748
|
|
191,559
|
|
930,362
|
|
615,302
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share attributable to Mohawk Industries, Inc.
|
|
|
|
|
|
|
|
|
Basic earnings per
share attributable to Mohawk Industries, Inc.
|
|
$
3.15
|
|
2.59
|
|
12.55
|
|
8.37
|
Weighted-average
common shares outstanding - basic
|
|
74,164
|
|
73,924
|
|
74,104
|
|
73,516
|
|
|
|
|
|
|
|
|
|
Diluted earnings
per share attributable to Mohawk Industries, Inc.
|
|
|
|
|
|
|
|
|
Diluted earnings per
share attributable to Mohawk Industries, Inc.
|
|
$
3.13
|
|
2.57
|
|
12.48
|
|
8.31
|
Weighted-average
common shares outstanding - diluted
|
|
74,638
|
|
74,475
|
|
74,568
|
|
74,043
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Financial
Information
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
$
104,379
|
|
94,025
|
|
409,467
|
|
362,647
|
Capital
expenditures
|
|
$
211,365
|
|
151,587
|
|
672,125
|
|
503,657
|
|
|
|
|
|
|
|
|
|
Consolidated
Balance Sheet Data
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2016
|
|
December 31,
2015
|
ASSETS
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
|
$
121,665
|
|
81,692
|
Receivables, net
|
|
|
|
|
|
1,376,151
|
|
1,257,505
|
Inventories
|
|
|
|
|
|
1,675,751
|
|
1,607,256
|
Prepaid expenses and other current assets
|
|
|
|
|
|
297,945
|
|
303,519
|
Total
current assets
|
|
|
|
|
|
3,471,512
|
|
3,249,972
|
Property, plant and
equipment, net
|
|
|
|
|
|
3,370,348
|
|
3,147,118
|
Goodwill
|
|
|
|
|
|
2,274,426
|
|
2,293,365
|
Intangible assets,
net
|
|
|
|
|
|
834,606
|
|
936,541
|
Deferred income taxes
and other non-current assets
|
|
|
|
|
|
279,704
|
|
307,404
|
Total assets
|
|
|
|
|
|
$
10,230,596
|
|
9,934,400
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Current portion of
long-term debt and commercial paper
|
|
|
|
|
|
$
1,382,738
|
|
2,003,003
|
Accounts payable and
accrued expenses
|
|
|
|
|
|
1,335,582
|
|
1,256,025
|
Total
current liabilities
|
|
|
|
|
|
2,718,320
|
|
3,259,028
|
Long-term debt, less
current portion
|
|
|
|
|
|
1,128,747
|
|
1,188,964
|
Deferred income taxes
and other long-term liabilities
|
|
|
|
|
|
576,346
|
|
603,593
|
Total
liabilities
|
|
|
|
|
|
4,423,413
|
|
5,051,585
|
Redeemable
noncontrolling interest
|
|
|
|
|
|
23,696
|
|
21,952
|
Total stockholders'
equity
|
|
|
|
|
|
5,783,487
|
|
4,860,863
|
Total liabilities and stockholders' equity
|
|
|
|
|
|
$
10,230,596
|
|
9,934,400
|
|
|
|
|
|
|
|
|
|
Segment
Information
|
|
Three Months
Ended
|
|
As of or for the
Twelve Months Ended
|
(Amounts in
thousands)
|
|
December 31,
2016
|
|
December 31,
2015
|
|
December 31,
2016
|
|
December 31,
2015
|
|
|
|
|
|
|
|
|
|
Net sales:
|
|
|
|
|
|
|
|
|
Global Ceramic
|
|
$
749,146
|
|
711,691
|
|
3,174,706
|
|
3,012,859
|
Flooring NA
|
|
970,136
|
|
879,765
|
|
3,865,746
|
|
3,602,112
|
Flooring ROW
|
|
463,284
|
|
406,508
|
|
1,918,635
|
|
1,456,898
|
Intersegment sales
|
|
-
|
|
33
|
|
-
|
|
(306)
|
Consolidated net sales
|
|
$
2,182,566
|
|
1,997,997
|
|
8,959,087
|
|
8,071,563
|
|
|
|
|
|
|
|
|
|
Operating income
(loss):
|
|
|
|
|
|
|
|
|
Global Ceramic
|
|
$
102,080
|
|
87,583
|
|
478,448
|
|
414,154
|
Flooring NA
|
|
140,311
|
|
118,410
|
|
505,115
|
|
264,271
|
Flooring ROW
|
|
70,735
|
|
50,206
|
|
333,091
|
|
203,370
|
Corporate and eliminations
|
|
(7,854)
|
|
(6,957)
|
|
(36,711)
|
|
(44,229)
|
Consolidated operating income
|
|
$
305,272
|
|
249,242
|
|
1,279,943
|
|
837,566
|
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
Global Ceramic
|
|
|
|
|
|
$
4,024,859
|
|
3,846,133
|
Flooring NA
|
|
|
|
|
|
3,410,856
|
|
3,164,525
|
Flooring ROW
|
|
|
|
|
|
2,689,592
|
|
2,805,246
|
Corporate and eliminations
|
|
|
|
|
|
105,289
|
|
118,496
|
Consolidated assets
|
|
|
|
|
|
$
10,230,596
|
|
9,934,400
|
Reconciliation of
Net Earnings Attributable to Mohawk Industries, Inc. to Adjusted
Net Earnings Attributable to Mohawk Industries, Inc. and Adjusted
Diluted Earnings Per Share Attributable to Mohawk Industries,
Inc.
|
(Amounts in
thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
|
|
December 31,
2016
|
|
December 31,
2015
|
|
December 31,
2016
|
|
December 31,
2015
|
Net earnings
attributable to Mohawk Industries, Inc.
|
|
|
|
$
233,748
|
|
191,559
|
|
930,362
|
|
615,302
|
Adjusting
items:
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related and other
costs
|
|
|
|
16,214
|
|
30,820
|
|
60,523
|
|
74,604
|
Acquisitions purchase
accounting (inventory step-up)
|
|
|
|
-
|
|
21
|
|
-
|
|
13,337
|
Legal settlement and
reserves
|
|
|
|
-
|
|
(2,520)
|
|
(90,000)
|
|
124,480
|
Release of
indemnification asset
|
|
|
|
3,004
|
|
11,180
|
|
5,371
|
|
11,180
|
Tradename
impairment
|
|
|
|
-
|
|
-
|
|
47,905
|
|
-
|
Deferred loan
costs
|
|
|
|
-
|
|
-
|
|
-
|
|
651
|
Income taxes -
reversal of uncertain tax position
|
|
|
|
(3,004)
|
|
(11,180)
|
|
(5,371)
|
|
(11,180)
|
Income
taxes
|
|
|
|
(6,678)
|
|
(9,889)
|
|
(8,443)
|
|
(72,872)
|
Adjusted net earnings
attributable to Mohawk Industries, Inc.
|
|
|
|
$
243,284
|
|
209,991
|
|
940,347
|
|
755,502
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted diluted
earnings per share attributable to Mohawk Industries,
Inc.
|
|
$
3.26
|
|
2.82
|
|
12.61
|
|
10.20
|
Weighted-average
common shares outstanding - diluted
|
|
|
|
74,638
|
|
74,475
|
|
74,568
|
|
74,043
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Total Debt to Net Debt
|
|
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2016
|
|
|
|
|
|
|
|
|
Current portion of
long-term debt and commercial paper
|
|
$
1,382,738
|
|
|
|
|
|
|
|
|
Long-term debt, less
current portion
|
|
1,128,747
|
|
|
|
|
|
|
|
|
Less: Cash and cash
equivalents
|
|
121,665
|
|
|
|
|
|
|
|
|
Net Debt
|
|
$
2,389,820
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Operating Income to Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
Trailing
Twelve
|
|
|
Three Months
Ended
|
|
Months
Ended
|
|
|
April 2,
2016
|
|
July 2,
2016
|
|
October 1,
2016
|
|
December 31,
2016
|
|
December 31,
2016
|
Operating
income
|
|
$
245,672
|
|
350,692
|
|
378,307
|
|
305,272
|
|
1,279,943
|
Other (expense)
income
|
|
(3,429)
|
|
5,807
|
|
(3,839)
|
|
3,190
|
|
1,729
|
Net (earnings) loss
attributable to non-controlling interest
|
|
(569)
|
|
(926)
|
|
(949)
|
|
(760)
|
|
(3,204)
|
Depreciation and
amortization
|
|
100,194
|
|
101,215
|
|
103,680
|
|
104,379
|
|
409,468
|
EBITDA
|
|
341,868
|
|
456,788
|
|
477,199
|
|
412,081
|
|
1,687,936
|
Restructuring,
acquisition and integration-related and other
costs
|
|
7,718
|
|
6,020
|
|
30,572
|
|
16,214
|
|
60,524
|
Acquisitions purchase
accounting (inventory step-up)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Legal settlement and
reserves
|
|
-
|
|
-
|
|
(90,000)
|
|
-
|
|
(90,000)
|
Release of
indemnification asset
|
|
-
|
|
-
|
|
2,368
|
|
3,004
|
|
5,372
|
Tradename
impairment
|
|
-
|
|
-
|
|
47,905
|
|
-
|
|
47,905
|
Adjusted
EBITDA
|
|
$
349,586
|
|
462,808
|
|
468,044
|
|
431,299
|
|
1,711,737
|
|
|
|
|
|
|
|
|
|
|
|
Net Debt to Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
1.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net Sales to Net Sales on a Constant Exchange Rate and Constant
Shipping Days Excluding Acquisition Volume
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
|
|
December 31,
2016
|
|
December 31,
2015
|
|
December 31,
2016
|
|
December 31,
2015
|
|
|
Net sales
|
|
$
2,182,566
|
|
1,997,997
|
|
8,959,087
|
|
8,071,563
|
|
|
Adjustment to net
sales on constant shipping days
|
|
(23,872)
|
|
-
|
|
-
|
|
-
|
|
|
Adjustment to net
sales on a constant exchange rate
|
|
16,731
|
|
-
|
|
68,962
|
|
-
|
|
|
Net sales on a
constant exchange rate and constant shipping days
|
|
2,175,425
|
|
1,997,997
|
|
9,028,049
|
|
8,071,563
|
|
|
Less: impact of
acquisition volume
|
|
(38,436)
|
|
-
|
|
(509,172)
|
|
-
|
|
|
Net sales on a
constant exchange rate and constant shipping days excluding
acquisition volume
|
$
2,136,989
|
|
1,997,997
|
|
8,518,877
|
|
8,071,563
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment Net Sales to Segment Net Sales on a Constant Exchange Rate
and Constant Shipping Days
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
Global
Ceramic
|
|
December 31,
2016
|
|
December 31,
2015
|
|
|
|
|
|
|
Net sales
|
|
$
749,146
|
|
711,691
|
|
|
|
|
|
|
Adjustment to net
sales on constant shipping days
|
|
(8,224)
|
|
-
|
|
|
|
|
|
|
Adjustment to segment
net sales on a constant exchange rate
|
|
5,134
|
|
-
|
|
|
|
|
|
|
Segment net sales on
a constant exchange rate and constant shipping
days
|
$
746,056
|
|
711,691
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment Net Sales to Segment Net Sales on Constant Shipping
Days
|
|
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
Flooring
NA
|
|
December 31,
2016
|
|
December 31,
2015
|
|
|
|
|
|
|
Net sales
|
|
$
970,136
|
|
879,765
|
|
|
|
|
|
|
Adjustment to net
sales on constant shipping days
|
|
(15,647)
|
|
-
|
|
|
|
|
|
|
Segment net sales on
constant shipping days
|
$
954,489
|
|
879,765
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment Net Sales to Segment Net Sales on a Constant Exchange Rate
and Constant Shipping Days Excluding Acquisition
Volume
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
Flooring
ROW
|
|
December 31,
2016
|
|
December 31,
2015
|
|
|
|
|
|
|
Net sales
|
|
$
463,284
|
|
406,508
|
|
|
|
|
|
|
Adjustment to net
sales on constant shipping days
|
|
-
|
|
-
|
|
|
|
|
|
|
Adjustment to segment
net sales on a constant exchange rate
|
|
11,597
|
|
-
|
|
|
|
|
|
|
Segment net sales on
a constant exchange rate and constant shipping
days
|
|
474,881
|
|
406,508
|
|
|
|
|
|
|
Less: impact of
acquisition volume
|
|
(38,436)
|
|
-
|
|
|
|
|
|
|
Segment net sales on
a constant exchange rate and constant shipping days excluding
acquisition volume
|
$
436,445
|
|
406,508
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Gross Profit to Adjusted Gross Profit, excluding acquisition
impact
|
|
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
December 31,
2016
|
|
December 31,
2015
|
|
|
|
|
|
|
Gross
Profit
|
|
$
690,999
|
|
622,210
|
|
|
|
|
|
|
Adjustments to gross
profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related and other
costs
|
|
12,218
|
|
15,945
|
|
|
|
|
|
|
Acquisitions purchase
accounting (inventory step-up)
|
|
-
|
|
21
|
|
|
|
|
|
|
Adjusted gross
profit
|
|
703,217
|
|
638,176
|
|
|
|
|
|
|
Less: Impact of
acquisition
|
|
(7,650)
|
|
0
|
|
|
|
|
|
|
Adjusted gross profit
excluding acquisition impact
|
$
695,567
|
|
638,176
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Selling, General and Administrative Expenses to Adjusted Selling,
General and Administrative Expenses
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
December 31,
2016
|
|
December 31,
2015
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
$
385,727
|
|
372,968
|
|
|
|
|
|
|
Adjustments to
selling, general and administrative expenses:
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related and other
costs
|
|
(3,996)
|
|
(14,875)
|
|
|
|
|
|
|
Legal settlement and
reserves
|
|
-
|
|
2,520
|
|
|
|
|
|
|
Adjusted
selling, general and administrative expenses
|
|
$
381,731
|
|
360,613
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Operating Income to Adjusted Operating Income on a Constant
Exchange Rate
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
|
|
December 31,
2016
|
|
December 31,
2015
|
|
December 31,
2016
|
|
December 31,
2015
|
|
|
Operating
income
|
|
$
305,272
|
|
249,242
|
|
1,279,943
|
|
837,566
|
|
|
Adjustments to
operating income:
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related and other
costs
|
|
16,214
|
|
30,820
|
|
59,847
|
|
74,604
|
|
|
Legal settlement and
reserves
|
|
-
|
|
(2,520)
|
|
(90,000)
|
|
124,480
|
|
|
Tradename
impairment
|
|
-
|
|
-
|
|
47,905
|
|
-
|
|
|
Acquisitions purchase
accounting (inventory step-up)
|
|
-
|
|
21
|
|
-
|
|
13,337
|
|
|
Adjusted operating
income
|
|
321,486
|
|
277,563
|
|
1,297,695
|
|
1,049,987
|
|
|
Adjustment to operating income on a constant exchange
rate
|
|
5,080
|
|
-
|
|
19,248
|
|
-
|
|
|
Adjusted
operating income on constant exchange rate
|
|
$
326,566
|
|
277,563
|
|
1,316,943
|
|
1,049,987
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment Operating Income to Adjusted Segment Operating
Income
|
|
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
Global
Ceramic
|
|
December 31,
2016
|
|
December 31,
2015
|
|
|
|
|
|
|
Operating
income
|
|
$
102,080
|
|
87,583
|
|
|
|
|
|
|
Adjustments to
segment operating income:
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related and other
costs
|
|
1,303
|
|
4,872
|
|
|
|
|
|
|
Adjusted segment
operating income
|
|
$
103,383
|
|
92,455
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment Operating Income to Adjusted Segment Operating
Income
|
|
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
Flooring
NA
|
|
December 31,
2016
|
|
December 31,
2015
|
|
|
|
|
|
|
Operating
income
|
|
$
140,311
|
|
118,410
|
|
|
|
|
|
|
Adjustments to
segment operating income:
|
|
|
|
|
|
|
|
|
|
|
Legal settlement and
reserves
|
|
-
|
|
(2,520)
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related and other
costs
|
|
5,826
|
|
8,852
|
|
|
|
|
|
|
Adjusted
segment operating income
|
|
$
146,137
|
|
124,742
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment Operating Income to Adjusted Segment Operating
Income
|
|
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
Flooring
ROW
|
|
December 31,
2016
|
|
December 31,
2015
|
|
|
|
|
|
|
Operating
income
|
|
$
70,735
|
|
50,206
|
|
|
|
|
|
|
Adjustments to
segment operating income:
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related and other
costs
|
|
8,903
|
|
16,254
|
|
|
|
|
|
|
Acquisitions purchase
accounting (inventory step-up)
|
|
-
|
|
21
|
|
|
|
|
|
|
Adjusted segment
operating income
|
|
$
79,638
|
|
66,481
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free Cash
Flow
|
|
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months
Ended
|
|
|
|
|
|
|
|
|
December 31,
2016
|
|
December 31,
2015
|
|
|
|
|
|
|
Net cash provided by
(used in) operating activities
|
|
1,327,553
|
|
911,873
|
|
|
|
|
|
|
Less: Capital
expenditures
|
|
672,125
|
|
503,657
|
|
|
|
|
|
|
Free cash
flow
|
|
$
655,428
|
|
408,216
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Earnings incl Noncontrolling Interests Before Income Taxes to
Adjusted Earnings incl Noncontrolling Interests Before Income
Taxes
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
December 31,
2016
|
|
December 31,
2015
|
|
|
|
|
|
|
Earnings before
income taxes
|
|
$
299,977
|
|
219,237
|
|
|
|
|
|
|
Noncontrolling
interests
|
|
(760)
|
|
(446)
|
|
|
|
|
|
|
Adjustments to
earnings including noncontrolling interests before income
taxes:
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related & other
costs
|
|
16,214
|
|
30,820
|
|
|
|
|
|
|
Acquisitions purchase
accounting (inventory step-up)
|
|
-
|
|
21
|
|
|
|
|
|
|
Legal settlement and
reserves
|
|
-
|
|
(2,520)
|
|
|
|
|
|
|
Release of
indemnification asset
|
|
3,004
|
|
11,180
|
|
|
|
|
|
|
Adjusted
earnings including noncontrolling interests before income
taxes
|
|
$
318,435
|
|
258,292
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Reconciliation of
Income Tax Expense to Adjusted Income Tax
Expense
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(Amounts in
thousands)
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Three Months
Ended
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December 31,
2016
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December 31,
2015
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Income tax
expense
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$
65,469
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27,232
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Income taxes -
reversal of uncertain tax position
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3,004
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11,180
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Income tax effect of
adjusting items
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6,678
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9,889
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Adjusted
income tax expense
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$
75,151
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48,301
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Adjusted income tax
rate
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23.6%
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18.7%
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The Company
supplements its consolidated financial statements, which are
prepared and presented in accordance with US GAAP, with certain
non-GAAP financial measures. As required by the Securities and
Exchange Commission rules, the tables above present a
reconciliation of the Company's non-GAAP financial measures to the
most directly comparable US GAAP measure. Each of the non-GAAP
measures set forth above should be considered in addition to the
comparable US GAAP measure, and may not be comparable to similarly
titled measures reported by other companies. The Company believes
these non-GAAP measures, when reconciled to the corresponding US
GAAP measure, help its investors as follows: Non-GAAP revenue
measures that assist in identifying growth trends and in
comparisons of revenue with prior and future periods and
non-GAAP profitability measures that assist in understanding the
long-term profitability trends of the Company's business and in
comparisons of its profits with prior and future
periods.
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The Company excludes
certain items from its non-GAAP revenue measure because these items
can vary dramatically between periods and can obscure underlying
business trends. Items excluded from the Company's non-GAAP revenue
measures include: foreign currency transactions and translation,
more or fewer shipping days in a period and the impact of
acquisitions.
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The Company excludes
certain items from its non-GAAP profitability measures because
these items may not be indicative of, or are unrelated to, the
Company's core operating performance. Items excluded from the
Company's non-GAAP profitability measures include: restructuring,
acquisition and integration-related and other costs, legal
settlements and reserves, tradename impairments, acquisition
purchase accounting (inventory step-up), release of indemnification
assets and the reversal of uncertain tax positions.
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