Mohawk First Quarter Sales Jump 22%; Ceramic Segment Sees 69% Increase
Mohawk Industries Inc. recently announced 2014 first quarter net earnings of $81 million and net sales of $1.8 billion, an increase of 22% as reported and 21% on a constant exchange basis vs. the prior year’s first quarter.
The Ceramic segment’s adjusted operating margins grew 160 basis points to 9% of net sales as a result of higher volumes, efficiency gains and improved mix. Net sales for the segment were $695 million, up 69% compared to the prior year, reportedly primarily due to the Marazzi acquisition and legacy sales growth in North America. The company’s ceramic business in North American expanded its design offerings and enhanced its market position with new larger sizes, rectangles and longer planks. The company announced the construction of a new U.S. ceramic plant to manufacture premium products, with production scheduled to start up by the end of 2015. The company’s ceramic business in Europe increased its profitability through new sales and manufacturing strategies that reduced cost and improved product mix. On a local basis, the company’s ceramic business in Russia significantly grew its revenues and operating income with higher volumes and improved mix, despite a slowing economy.
“First quarter earnings were higher than expected due to our 2013 acquisitions, improved productivity across our business and stronger results outside North America, although severe winter weather in the U.S. impacted sales,” said Jeffrey S. Lorberbaum, chairman and CEO. “During the period, we continued making progress with our acquisitions, including enhancing our organizational structures, sales strategies, product offerings and productivity. Our adjusted operating income for the quarter increased 47% to approximately 8% of net sales as initiatives drove higher earnings across all divisions and operational improvements gained traction in our acquisitions.”
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