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Mohawk reports record Q2

Calhoun, Ga. - Mohawk Industries Inc. enjoyed its "most successful second quarter on record," spurred by strong revenue and profit growth, thanks to better-than-expected performances from its legacy business - carpet and rugs in particular - as well as its recent acquisitions.

Jeffrey Lorberbaum, chairman and ceo, explained that the company's legacy net sales increased 6%, with the balance of Mohawk Ind.'s growth stemming from its recent acquisitions of Pergo, Marazzi and Spano.

Mohawk's legacy business was greatly aided by the performance of the carpet division, which includes rugs. Its net sales were up 5% to $771 million, "rising to their highest levels in more than four years, due to improvements in residential new construction and remodeling and continued strength in the commercial sector," he noted.

Additionally, the carpet division's operating income, excluding unusual charges, was 7% of sales, up 100 basis points, due to volume leverage, improved sales mix from new products and lower SG&A. Residential sales in the specialty channel showed substantial growth, and home center business increased during the period.

Rugs as a category improved with a greater focus on new distribution channels and product categories, the company said. Operating margins continued to expand thanks to higher volume, the market's response to "super-soft products" and improved manufacturing and logistics efficiencies. During the quarter, Mohawk raised carpet price to align with earlier raw material increases in the third quarter.

Looking at the total company, quarterly net earnings jumped 16% to $85 million, or $1.16 per share. Excluding unusual charges, net earnings climbed 9% to $134 million, or $1.84 per share.

Mohawk Ind.'s net sales for the quarter swelled 35% to $2.0 billion.

Year to date, total sales rose 20% to $3.5 billion, and net earnings were up 18% to $135 million.

We are increasingly confident in the continued strengthening of the U.S. market, and we believe that continued job growth, expanded new home construction and greater remodeling investments along with our new acquisitions will improve our future results," said Lorberbaum.

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