Net sales for the quarter increased 2 percent to $1,247,181,000 compared to $1,227,747,000 for the second quarter of 2002. The sales increase was attributable to strong sales of hard surface products. The Mohawk segment net sales of $926,745,000 in the second quarter of 2003 were down 1 percent from $938,680,000 due to lower sales of residential replacement carpet and home products which reflected the general economic conditions.
The Dal-Tile segment net sales of $320,436,000 in the second quarter of 2003 grew 11 percent from $289,067,000 from internal growth. EPS for the first half of 2003 was $1.74 or $116,625,000 in net earnings compared to $1.91 EPS or $118,728,000 in net earnings for the first half of 2002. This decline in EPS and earnings is attributable to weak first quarter sales and higher raw material, energy and benefit costs in the carpet and rug industry. Net sales for the first half of 2003 were $2,331,896,000 representing an 11 percent increase from the first half of 2002 sales of $2,094,457,000. This sales increase resulted primarily from the acquisition of Dal-Tile and hard surface internal growth, according to Mohawk.
The debt to capitalization ratio was 28.9 percent at the end of the quarter. The company repurchased 100,000 shares of common stock in the second quarter and has purchased approximately 10,957,000 shares of common stock since the inception of the program in September 1999 when the Board of Directors authorized up to 15,000,000 shares to be repurchased. Inventory levels have increased to support the hard surface growth in both the Mohawk and Dal-Tile segments and as a result of the stone operation acquisition.