Mohawk profit up 12% in Q3
By Staff -- Home & Textiles Today, 10/17/2003 12:00:00 AM
Calhoun, GA — Buoyed by strong growth in its Dal-Tile hard flooring business, and getting a further lift from lower costs and interest expense, third-quarter profits at Mohawk Industries Inc. jumped up by 12.4 percent, to $91.4 million from $81.6 million last year.
Sales at the diversified floor coverings and home fashions producer rose by 6.4 percent, climbing to $1.3 billion from $1.2 billion the preceding year.
A driving force behind sales and earnings growth was the company's Dal-Tile unit, acquired early last year, where sales shot up by 13.0 percent, to $335.8 million from $297.1 million last year, far outpacing growth in the core Mohawk carpet and home fashions business. Sales in the Mohawk segment grew by 4.3 percent, to $967.4 million from $927.3 million a year ago.
Fueling the bottom line growth, in addition to the stronger sales, were modestly stronger margins, and lower costs and interest expense. Average gross margin improved by 10 basis points, or one-tenth of a percentage point, to 28.0 percent from 27.9 percent last year. Operating costs were whittled down by 40 basis points, or four-tenths of a percentage point, to 15.8 percent of sales from 16.2 percent. Interest expense was pared by 13.8 percent, to $14.2 million from $16.4 million last year, generating a cash savings of $2.4 million.
Commenting on the Mohawk side of the business, Jeffrey Lorberbaum, president and ceo, said "The overall carpet industry is showing signs of improvement with the new home business continuing to lead other sectors within the carpet industry. We believe the other segments of the floor coverings industry are also continuing to experience strong growth in new construction."
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