Acquisition boosts Mohawk results
April 28, 2006-- Home Textiles Today,
Calhoun, Ga. -- Getting a big assist from last year's acquisition of a Belgian flooring producer, which helped to offset weakness in its core U.S. carpeting business, Mohawk Industries recorded a first-quarter profit of $71.1 million, up slightly from $70.0 million.
The diversified floor covering and home textiles producer managed to boost earnings modestly even with a steep jump in interest expense as the company took on debt to pay for the October 2005 purchase of Unilin Holding NV, a producer of laminated floor products. Interest expense more than tripled, rising by 239.6%, to $40.3 million from $11.9 million last year. But Mohawk got the increased interest costs back and then some as Unilin contributed $40.0 million to operating profits during the period.
Boosted by Unilin, which brought in $302.6 million during the first three months of the year, Mohawk sales jumped up by 28.9%, to $1.9 billion from $1.5 billion last year. Mohawk's Dal-Tile business yielded a 17.9% increase in sales and a 19.0% boost in operating profit.
Sales at the core U.S. floor coverings business increased by 5.4%, to $1.2 billion, helped by price increases, but operating profit fell off by 20.3%, to $52.3 million, hurt by slowing sales growth and weaker margins in the residential replacement carpet business.
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