Mohawk Industries Inc. (MHK, Financial) filed Quarterly Report for the period ended 2009-03-28.
Mohawk Industries Inc. is one of the leading producers of woven and tufted broadloom carpet and rugs for principally residential applications.The company designs manufactures and markets carpet and rugs in a broad range of colors textures and patterns. The company is widely recognized through its premier brand names some of which are Mohawk Aladdin American Rug Craftsmen American Weavers Bigelow and Custom Weave. Mohawk Industries Inc. has a market cap of $3.24 billion; its shares were traded at around $47.31 with a P/E ratio of 43.4 and P/S ratio of 0.5. Mohawk Industries Inc. had an annual average earning growth of 13.5% over the past 10 years. GuruFocus rated Mohawk Industries Inc. the business predictability rank of 4.5-star.
Mohawk Segment - Net sales decreased $310.7 million, or 34.3%, to $594.3 million in the current quarter compared to $905.0 million in the first quarter of 2008. The decrease was primarily driven by a decline in sales volumes of approximately $180 million due to the continued decline in the U.S. residential market and softening commercial demand, a decrease of approximately $110 million due to an increase in warranty requirements described above in the overview and a decline of approximately $21 million due to the net effect of price and product mix.
Gross profit for the first quarter of 2009 was $153.7 million (12.7% of net sales) and represented a decrease of $306.1 million compared to gross profit of $459.8 million (26.5% of net sales) for the prior years first quarter. Gross profit in the current quarter was unfavorably impacted by a decrease of approximately $115 million resulting from a decline in sales volume, a decline of approximately $110 million due to an increase in warranty requirements described above in the overview, a decrease of approximately $30 million for higher manufacturing costs as a result of the lower volumes and a decline of approximately $30 million due to the net effect of price and product mix.
Operating loss for the first quarter of 2009 was $145.9 million reflecting a decrease of $270.2 million compared to operating income of $124.3 million (7.2% of net sales) in the first quarter of 2008. The decrease was primarily driven by a decline in sales volumes of approximately $115 million, a decline of approximately $110 million due to an increase in warranty requirements described above in the overview and a decline of approximately $30 million due to the net effect of price and product mix.
Mohawk Segment - Operating loss was $179.1 million in the first quarter of 2009 reflecting a decrease of $201.3 million compared to operating income of $22.2 million (2.5% of segment net sales) in the first quarter of 2008. The decrease was primarily due to a decline of approximately $110 million due to an increase in warranty requirements described above in the overview, a decline in sales volumes of approximately $51 million, higher manufacturing costs as a result of the lower volumes of approximately $18 million, net of cost savings initiatives, and a decline of approximately $10 million due to the net effect of price and product mix.
Unilin Segment - Operating income was $14.6 million (5.4% of segment net sales) in the first quarter of 2009 reflecting a decrease of $35.4 million compared to operating income of $50.0 million (12.4% of segment net sales) for the first quarter of 2008. The decrease was primarily due to a decline in sales volumes of approximately $31 million, a decline of approximately $16 million due to the net effect of price and product mix, partially offset by lower costs for raw materials and cost savings initiatives of approximately $19 million.
Read the The complete ReportMHK is in the portfolios of Ruane Cunniff of Ruane & Cunniff & Goldfarb Inc, Bruce Berkowitz of Fairholme Capital Managment, Wallace Weitz of Weitz Wallace R & Co, Ron Baron of Baron Funds, John Rogers of ARIEL CAPITAL MANAGEMENT LLC, Arnold Van Den Berg of Century Management, Prem Watsa of Fairfax Financial Holdings, Inc..
Mohawk Industries Inc. is one of the leading producers of woven and tufted broadloom carpet and rugs for principally residential applications.The company designs manufactures and markets carpet and rugs in a broad range of colors textures and patterns. The company is widely recognized through its premier brand names some of which are Mohawk Aladdin American Rug Craftsmen American Weavers Bigelow and Custom Weave. Mohawk Industries Inc. has a market cap of $3.24 billion; its shares were traded at around $47.31 with a P/E ratio of 43.4 and P/S ratio of 0.5. Mohawk Industries Inc. had an annual average earning growth of 13.5% over the past 10 years. GuruFocus rated Mohawk Industries Inc. the business predictability rank of 4.5-star.
Highlight of Business Operations:
Net sales for the quarter ended March 28, 2009 were $1,208.3 million, reflecting a decrease of $529.8 million, or 30.5%, from the $1,738.1 million reported for the quarter ended March 29, 2008. The decrease was primarily driven by a decline in sales volumes of approximately $343 million due to the continued decline in the U.S. residential market, softening commercial demand and slowing European demand, a decrease of approximately $110 million due to an increase in warranty requirements described above in the overview, a decline of approximately $47 million due to unfavorable price and product mix and a decline of approximately $30 million due to unfavorable foreign exchange rates.Mohawk Segment - Net sales decreased $310.7 million, or 34.3%, to $594.3 million in the current quarter compared to $905.0 million in the first quarter of 2008. The decrease was primarily driven by a decline in sales volumes of approximately $180 million due to the continued decline in the U.S. residential market and softening commercial demand, a decrease of approximately $110 million due to an increase in warranty requirements described above in the overview and a decline of approximately $21 million due to the net effect of price and product mix.
Gross profit for the first quarter of 2009 was $153.7 million (12.7% of net sales) and represented a decrease of $306.1 million compared to gross profit of $459.8 million (26.5% of net sales) for the prior years first quarter. Gross profit in the current quarter was unfavorably impacted by a decrease of approximately $115 million resulting from a decline in sales volume, a decline of approximately $110 million due to an increase in warranty requirements described above in the overview, a decrease of approximately $30 million for higher manufacturing costs as a result of the lower volumes and a decline of approximately $30 million due to the net effect of price and product mix.
Operating loss for the first quarter of 2009 was $145.9 million reflecting a decrease of $270.2 million compared to operating income of $124.3 million (7.2% of net sales) in the first quarter of 2008. The decrease was primarily driven by a decline in sales volumes of approximately $115 million, a decline of approximately $110 million due to an increase in warranty requirements described above in the overview and a decline of approximately $30 million due to the net effect of price and product mix.
Mohawk Segment - Operating loss was $179.1 million in the first quarter of 2009 reflecting a decrease of $201.3 million compared to operating income of $22.2 million (2.5% of segment net sales) in the first quarter of 2008. The decrease was primarily due to a decline of approximately $110 million due to an increase in warranty requirements described above in the overview, a decline in sales volumes of approximately $51 million, higher manufacturing costs as a result of the lower volumes of approximately $18 million, net of cost savings initiatives, and a decline of approximately $10 million due to the net effect of price and product mix.
Unilin Segment - Operating income was $14.6 million (5.4% of segment net sales) in the first quarter of 2009 reflecting a decrease of $35.4 million compared to operating income of $50.0 million (12.4% of segment net sales) for the first quarter of 2008. The decrease was primarily due to a decline in sales volumes of approximately $31 million, a decline of approximately $16 million due to the net effect of price and product mix, partially offset by lower costs for raw materials and cost savings initiatives of approximately $19 million.
Read the The complete ReportMHK is in the portfolios of Ruane Cunniff of Ruane & Cunniff & Goldfarb Inc, Bruce Berkowitz of Fairholme Capital Managment, Wallace Weitz of Weitz Wallace R & Co, Ron Baron of Baron Funds, John Rogers of ARIEL CAPITAL MANAGEMENT LLC, Arnold Van Den Berg of Century Management, Prem Watsa of Fairfax Financial Holdings, Inc..
