Mohawk posts sales and earnings gains; "Our company continues to manage costs and our customers are positive about the coming year"
Rising consumer confidence and the ability to manage the spiraling costs of raw material are being credited for fourth quarter sales and earnings gains announced by Mohawk Industries, Inc. The gains capped a solid year of grow for the floor covering company which also operates the ceramic tile company Dal-Tile
Mohawk posted fourth-quarter profit of $102.5 million, or $1.52 per share, up slightly from $102.1 million, or $1.51 per share, last year. Revenue for the quarter was $1.48 billion, up 8 percent from $1.37 billion. Overall, net earnings for the year grew by 19 percent to $368 million from $310 million the previous fiscal year. Net sales last year increased 18 percent to $5.88 billion from $4.99 billion. This sales increase is attributed to growth in both the Mohawk and Dal-Tile segments.
Mohawk chairman and CEO, Jeffrey S. Lorberbaum, said the fourth quarter results reflected the company's ability to deal with production costs increases. "Our company continues to manage costs and pricing to offset raw material and energy costs increases during the quarter," said Lorberbaum.
"The Mohawk segment continued its strong growth in all channels as consumers are more optimistic about their financial future," he continued. "Our customers are embracing our regional market concept and are positive about the coming year. Additionally, new residential housing remains strong with the commercial business continuing to improve.
"The Dal-Tile segment continued its strong growth driven by our investment in new products, inventory availability, additional sales personnel and updated sales service centers. All product categories are achieving positive growth led by floor tile and stone. The Muskogee plant is running at full capacity with an improving product mix.
"Our suppliers for the Mohawk segment have continued to raise their prices since our October price increase. We have announced price increases in the first quarter to offset these changes but there will be a lag between the cost increases and the implementation of new selling prices. We believe these cost increases will moderate over the long-term but the short-term trend of these costs remains uncertain.
"Our balance sheet is strong with 25 percent debt to capitalization providing much flexibility for future investments. We continue to invest in our business with major expansions planned in ceramic tile production, extrusion and yarn processing and warehousing.
"During the fourth quarter, we introduced our latest Mohawk fiber brand, SmartStrand made with DuPont Sorona polymer. SmartStrand is a superior carpet fiber with the resilience of nylon, engineered-in stain resistance and an inherently soft touch. By offering the consumer a revolutionary product with the strength of two of the most recognized brands in flooring. Mohawk's SmartStrand is poised for success.
"We recently completed the acquisition of Wayn-Tex Inc., a carpet-backing manufacturer. The purchase of these assets enhances our position in the marketplace. Mohawk requirements exceed the current production of the facilities and we are implementing changes to improve the efficiencies.
"Finally, I am proud to report that Forbes Magazine has recognized Mohawk Industries as one of the 400 Best Companies in America. In addition, Sears and Home Expo named Karastan 'Vendor of the Year' as recognition for our outstanding service & superior product. Dal-Tile was voted 'Best Business Experience' by commercial designers. These are additional indications of the strength of our organization as we strive to continue providing superior value to our customers."