This compares to $55,727,000 in net earnings and $1.05 in EPS for the third quarter of 2001.
This improvement was the result of the contribution to earnings, net of the acquisition effects, from the Dal-Tile operations of $0.05 EPS; increased earnings of $0.09 EPS from Mohawk operations as a result of higher sales and lower costs; and an average reduction of approximately 743,000 shares of stock for the third quarter of 2002 which contributed $0.02 EPS.
Net sales for the quarter increased 35 percent to $1,224,403,000 from $907,850,000 in 2001, a result of the Dal-Tile merger and internal growth of Mohawk products.
Net sales for the third quarter increased 3.8 percent on a proforma basis. The Mohawk segment net sales of $927,065,000 grew 2 percent primarily from hard surface products and the Dal-Tile segment net sales of $297,338,000 grew 9 percent (from $271,589,000) primarily from residential products.
Net earnings for the first nine months of 2002 were $200,288,000 (55 percent above last year), or $3.13 in EPS (28 percent above last year), compared to $129,399,000 in net earnings, or $2.44 in EPS, for the first nine months of 2001.
This improvement in EPS and net earnings is attributable to the Dal-Tile acquisition, sales growth, operating earnings growth and an average reduction of approximately 538,000 shares of stock for the first nine months of 2002. Net sales for the first nine months increased 30 percent to $3,318,860,000 from $2,550,147,000.
The Mohawk segment sales of $2,703,738,000 grew 6 percent and the Dal-Tile segment proforma sales of $851,166,000 grew 9 percent. Total company net sales increased 7 percent on a proforma basis.
The debt to capitalization ratio decreased to 33 percent this quarter with approximately $75,000,000 of debt reduction, the result of strong earnings and effective working capital management offset by the repurchase of 1,128,300 shares of stock.
The company has reduced debt by approximately $206,000,000 since the acquisition of Dal-Tile, and plans to continue with its stock repurchases. The company has approximately 4,879,000 shares open to repurchase from its original authorization. The effective income tax rate was reduced when compared to the first half of 2002 due to tax credits realized in the third quarter of $2,500,000 with a comparable amount expected in the fourth quarter.
The total company third quarter and year-to-date gross profit percentage to net sales increased from 24.2 percent in 2001 to 27.8 percent in 2002, and from 24 percent in 2001 to 27 percent in 2002 respectively. This increase is attributable to Dal-Tile's higher gross profit levels.
The total company SG&A percentage to net sales for the third quarter and nine months increased from 14 percent in 2001 to 16.2 percent in 2002, and from 15 percent in 2001 to 16.2 percent in 2002, attributable to Dal-Tile's higher SG&A levels.