Mohawk Announces 2015 Results, Plans to Increase Ceramic Segment Capacity
Mohawk Industries, Inc. recently announced 2015 fourth quarter net earnings of $192 million and diluted earnings per share (EPS) of $2.57. Excluding restructuring, acquisition and other charges, net earnings were $210 million and EPS was $2.82, a 24% increase over last year’s fourth quarter adjusted EPS. Net sales for the fourth quarter of 2015 were $2.0 billion, up 2% vs. the prior year’s fourth quarter with four less shipping days, or a 13% increase on a constant days and currency exchange rate basis.
For the 12 months ending December 31, 2015, net sales were $8.1 billion, an increase of approximately 3% vs. the prior year, or an increase of approximately 10% on a constant currency exchange rate basis. Net earnings and EPS for the 12-month period were $615 million and $8.31, respectively. Net earnings excluding restructuring, acquisition and other charges were $756 million and EPS was $10.20, an increase of 25% over the 12-month period adjusted EPS result in 2014.
“Our strong performance during 2015 was the result of our aggressive growth strategy and targeted investments we began in 2013 as the economic recovery gained momentum,” said Jeffrey S. Lorberbaum, chairman and CEO. “Since that time, we have invested almost $5 billion, approximately $3.5 billion in nine acquisitions to expand our product offerings, geographies and market share and approximately $1.5 billion in our existing business to introduce innovative products, enhance manufacturing efficiencies and expand our capacity. While making these investments for future growth, we strengthened our balance sheet and reduced our leverage, enabling us to continue optimizing our shareholder returns. We remain optimistic about 2016, and this year we will invest an additional $600 to $650 million in internal projects, which include increased ceramic capacity and upgrades in the U.S., Mexico, Europe, and Russia, process improvements in carpet manufacturing, additional LVT manufacturing in the U.S. and Europe, increased wood production in U.S. and Europe, and installation of advanced technology in our U.S. and European laminate businesses. Last year, we achieved record results in every quarter with about 30% of our business outside the U.S., where we faced significant foreign exchange translation headwinds. If adjusted for exchange rate changes, our 2015 net sales would have been $490 million higher—an impact of approximately 6%—and our operating income would have been $74 million greater, a 9% impact.”
For the 2015 fourth quarter, sales in the Global Ceramic segment dropped 4%. On a constant days and exchange rate basis, sales grew 7% and adjusted operating income rose 14% vs. the prior year, with adjusted operating margin increasing to 13%. In the Flooring North America segment, sales were flat vs. last year for the quarter, or increased 6% on a constant day’s basis with adjusted operating income increasing 31%. Flooring Rest of the World segment’s sales rose 22% in the fourth quarter of 2015, or 41% on a constant days and exchange rate basis with adjusted operating income improving 59% over the prior year.
“2015 was the best year in Mohawk’s history, and we expect the momentum to continue this year,” said Lorberbaum. “We anticipate that the demand trends in our U.S. and international markets will remain consistent with what we have been experiencing. Although growth in Europe is limited and negative in Russia, our international businesses are delivering solid results on a local basis. Our sales and margins should continue to improve over last year as a result of our continued innovations, process improvements and disciplined execution. Our recent acquisitions are progressing with operational and market synergies that we anticipated. This year we will increase investments in our existing businesses to improve our long-term performance. Taking all these factors into account, our guidance for the first quarter is $2.24-2.33 per share, which would be a 32-37% increase over 2015, excluding any restructuring, acquisition and other charges.”
For more information, visit www.mohawkind.com.