Mohawk Industries, Inc. Announces Fourth Quarter Earnings
CALHOUN, Ga., Feb. 25 /PRNewswire-FirstCall/ -- Mohawk Industries, Inc. (NYSE: MHK) today announced 2009 fourth quarter net earnings of $20 million and diluted earnings per share (EPS) of $0.29 which included a restructuring charge of approximately $30 million primarily related to our distribution and manufacturing infrastructure. Excluding the restructuring charge, net earnings and EPS would have been $39 million and $0.56 per share, respectively. In the fourth quarter of 2008, the net loss was $128 million and loss per share was $1.87. Excluding the 2008 fourth quarter goodwill, intangible and restructuring charges, net loss and loss per share would have been $5.1 million and $0.08 per share, respectively. Net sales for the 2009 fourth quarter were $1,347 million, a decrease of 9% (11% with a constant exchange rate) from 2008. Strong working capital management, reductions in capital spending and active cost control enabled generation of free cash flow of $222 million for the quarter.
For the full year of 2009, our net loss was $5 million or a net loss per share of $0.08. For the full year of 2008, net loss and loss per share were $1,458 million and $21.32 per share, respectively. Net sales for 2009 were $5,344 million representing a 22% decrease from 2008. The sales decrease for both the quarter and the year in the U.S. and Europe is primarily attributable to continuing weak consumer discretionary spending, low home sales and soft business investment.
In commenting on the fourth quarter results, Jeffrey S. Lorberbaum, Chairman and CEO stated, "Our fourth quarter earnings exceeded expectations due to the implementation of cost savings efforts, personnel reductions and plant consolidations. Our balance sheet is strong with over $500 million of cash and a net debt to total capital ratio of 26%. All our segments have reduced infrastructure and capacity and improved productivity. New products have been developed in all segments that will enhance our sales and market position. In spite of the very difficult environment, we are strategically positioning our company for growth. Our geographic product expansion continues with enhanced distribution of ceramic tile in Mexico, laminate in Russia and wood flooring in Western Europe. Environmental sustainability is a priority and Newsweek recognized Mohawk as one of the top 15 companies in the consumer product category for our efforts."
Mohawk segment sales were down 8% for the fourth quarter, better than the industry. We are focused on streamlining the business and reducing costs in this segment. We have reorganized our commercial carpet manufacturing operations, consolidated our backing facilities, combined carpet and ceramic distribution warehousing and further reduced staffing levels. In the first quarter of 2010, we are implementing a price increase to recover raw material cost inflation. Our proprietary Smart Strand brand has achieved broad customer acceptance in the market place as a high value alternative to nylon and polyester due to its superior softness, enhanced performance and easy maintenance.
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