x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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52-1604305
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(State or other jurisdiction of
incorporation or organization)
|
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(I.R.S. Employer
Identification No.)
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|
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160 S. Industrial Blvd., Calhoun, Georgia
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30701
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
|
x
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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Smaller reporting company
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¨
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Emerging growth company
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¨
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Title of Each Class
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Trading Symbol
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Name of Each Exchange on Which Registered
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Common Stock, $.01 par value
|
MHK
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New York Stock Exchange
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Floating Rate Notes due 2019
|
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New York Stock Exchange
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Floating Rate Notes due 2020
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New York Stock Exchange
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2.000% Senior Notes due 2022
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New York Stock Exchange
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Page No
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Part I.
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Item 1.
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Condensed Consolidated Balance Sheets as of March 30, 2019 and December 31, 2018
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Condensed Consolidated Statements of Operations for the three months ended March 30, 3019 and March 31, 2018
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Condensed Consolidated Statements of Comprehensive Income (Loss) for the three months ended March 30, 2019 and March 31, 2018
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Condensed Consolidated Statements of Cash Flows for the three months ended March 30, 2019 and March 31, 2018
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Item 2.
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Item 3.
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Item 4.
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Part II.
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Item 1.
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||
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Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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March 30,
2019 |
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December 31,
2018 |
|||
ASSETS
|
|
|
|
|||
Current assets:
|
|
|
|
|||
Cash and cash equivalents
|
$
|
105,668
|
|
|
119,050
|
|
Receivables, net
|
1,743,581
|
|
|
1,606,159
|
|
|
Inventories
|
2,338,125
|
|
|
2,287,615
|
|
|
Prepaid expenses
|
427,233
|
|
|
421,553
|
|
|
Other current assets
|
74,358
|
|
|
74,919
|
|
|
Total current assets
|
4,688,965
|
|
|
4,509,296
|
|
|
Property, plant and equipment
|
8,282,502
|
|
|
8,227,074
|
|
|
Less: accumulated depreciation
|
3,608,067
|
|
|
3,527,172
|
|
|
Property, plant and equipment, net
|
4,674,435
|
|
|
4,699,902
|
|
|
Right of use operating lease assets
|
320,800
|
|
|
—
|
|
|
Goodwill
|
2,548,997
|
|
|
2,520,966
|
|
|
Tradenames
|
702,774
|
|
|
707,380
|
|
|
Other intangible assets subject to amortization, net
|
247,790
|
|
|
254,430
|
|
|
Deferred income taxes and other non-current assets
|
421,314
|
|
|
407,149
|
|
|
|
$
|
13,605,075
|
|
|
13,099,123
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|||
Current liabilities:
|
|
|
|
|||
Short-term debt and current portion of long-term debt
|
$
|
1,763,332
|
|
|
1,742,373
|
|
Accounts payable and accrued expenses
|
1,571,273
|
|
|
1,523,866
|
|
|
Current operating lease liabilities
|
99,642
|
|
|
—
|
|
|
Total current liabilities
|
3,434,247
|
|
|
3,266,239
|
|
|
Deferred income taxes
|
422,772
|
|
|
413,740
|
|
|
Long-term debt, less current portion
|
1,497,975
|
|
|
1,515,601
|
|
|
Non-current operating lease liabilities
|
227,595
|
|
|
—
|
|
|
Other long-term liabilities
|
445,441
|
|
|
463,484
|
|
|
Total liabilities
|
6,028,030
|
|
|
5,659,064
|
|
|
Commitments and contingencies (Note 17)
|
|
|
|
|||
Stockholders’ equity:
|
|
|
|
|||
Preferred stock, $.01 par value; 60 shares authorized; no shares issued
|
—
|
|
|
—
|
|
|
Common stock, $.01 par value; 150,000 shares authorized; 79,771 and 79,656 shares issued in 2019 and 2018, respectively
|
798
|
|
|
797
|
|
|
Additional paid-in capital
|
1,853,484
|
|
|
1,852,173
|
|
|
Retained earnings
|
6,709,782
|
|
|
6,588,197
|
|
|
Accumulated other comprehensive loss
|
(777,547
|
)
|
|
(791,608
|
)
|
|
|
7,786,517
|
|
|
7,649,559
|
|
|
Less: treasury stock at cost; 7,349 and 7,349 shares in 2019 and 2018, respectively
|
215,716
|
|
|
215,745
|
|
|
Total Mohawk Industries, Inc. stockholders’ equity
|
7,570,801
|
|
|
7,433,814
|
|
|
Nonredeemable noncontrolling interest
|
6,244
|
|
|
6,245
|
|
|
Total stockholders’ equity
|
7,577,045
|
|
|
7,440,059
|
|
|
|
$
|
13,605,075
|
|
|
13,099,123
|
|
|
Three Months Ended
|
|||||
|
March 30,
2019 |
|
March 31,
2018 |
|||
Net sales
|
$
|
2,442,490
|
|
|
2,412,202
|
|
Cost of sales
|
1,817,563
|
|
|
1,707,510
|
|
|
Gross profit
|
624,927
|
|
|
704,692
|
|
|
Selling, general and administrative expenses
|
459,597
|
|
|
436,293
|
|
|
Operating income
|
165,330
|
|
|
268,399
|
|
|
Interest expense
|
10,473
|
|
|
7,528
|
|
|
Other expense (income), net
|
(3,736
|
)
|
|
3,998
|
|
|
Earnings before income taxes
|
158,593
|
|
|
256,873
|
|
|
Income tax expense
|
37,018
|
|
|
47,632
|
|
|
Net earnings including noncontrolling interests
|
121,575
|
|
|
209,241
|
|
|
Net (income) expense attributable to noncontrolling interests
|
(10
|
)
|
|
475
|
|
|
Net earnings attributable to Mohawk Industries, Inc.
|
$
|
121,585
|
|
|
208,766
|
|
|
|
|
|
|||
Basic earnings per share attributable to Mohawk Industries, Inc.
|
|
|
|
|||
Basic earnings per share attributable to Mohawk Industries, Inc.
|
$
|
1.68
|
|
|
2.80
|
|
Weighted-average common shares outstanding—basic
|
72,342
|
|
|
74,453
|
|
|
|
|
|
|
|||
Diluted earnings per share attributable to Mohawk Industries, Inc.
|
|
|
|
|||
Diluted earnings per share attributable to Mohawk Industries, Inc.
|
$
|
1.67
|
|
|
2.78
|
|
Weighted-average common shares outstanding—diluted
|
72,646
|
|
|
74,929
|
|
|
Three Months Ended
|
|||||
|
March 30,
2019 |
|
March 31,
2018 |
|||
Net earnings including noncontrolling interests
|
$
|
121,575
|
|
|
209,241
|
|
Other comprehensive income (loss):
|
|
|
|
|||
Foreign currency translation adjustments
|
13,962
|
|
|
72,393
|
|
|
Pension prior service cost and actuarial gain (loss), net of tax
|
108
|
|
|
(135
|
)
|
|
Other comprehensive income
|
14,070
|
|
|
72,258
|
|
|
Comprehensive income
|
135,645
|
|
|
281,499
|
|
|
Comprehensive income (loss) attributable to noncontrolling interests
|
(1
|
)
|
|
1,374
|
|
|
Comprehensive income attributable to Mohawk Industries, Inc.
|
$
|
135,646
|
|
|
280,125
|
|
|
Three Months Ended
|
|||||
|
March 30, 2019
|
|
March 31, 2018
|
|||
Cash flows from operating activities:
|
|
|
|
|||
Net earnings
|
$
|
121,575
|
|
|
209,241
|
|
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:
|
|
|
|
|||
Restructuring
|
32,937
|
|
|
18,182
|
|
|
Depreciation and amortization
|
137,291
|
|
|
122,654
|
|
|
Deferred income taxes
|
9,903
|
|
|
19,401
|
|
|
(Gain) loss on disposal of property, plant and equipment
|
1,164
|
|
|
(1,277
|
)
|
|
Stock-based compensation expense
|
5,789
|
|
|
7,948
|
|
|
Changes in operating assets and liabilities, net of effects of acquisitions:
|
|
|
|
|||
Receivables, net
|
(142,518
|
)
|
|
(104,287
|
)
|
|
Inventories
|
(39,409
|
)
|
|
(74,499
|
)
|
|
Other assets and prepaid expenses
|
(2,474
|
)
|
|
(182
|
)
|
|
Accounts payable and accrued expenses
|
71,199
|
|
|
(14,250
|
)
|
|
Other liabilities
|
(25,320
|
)
|
|
297
|
|
|
Net cash provided by operating activities
|
170,137
|
|
|
183,228
|
|
|
Cash flows from investing activities:
|
|
|
|
|||
Additions to property, plant and equipment
|
(136,948
|
)
|
|
(250,936
|
)
|
|
Acquisitions, net of cash acquired
|
(76,847
|
)
|
|
(24,410
|
)
|
|
Purchases of short-term investments
|
(154,000
|
)
|
|
(246,096
|
)
|
|
Redemption of short-term investments
|
156,000
|
|
|
280,000
|
|
|
Net cash used in investing activities
|
(211,795
|
)
|
|
(241,442
|
)
|
|
Cash flows from financing activities:
|
|
|
|
|||
Payments on Senior Credit Facilities
|
(132,030
|
)
|
|
(365,889
|
)
|
|
Proceeds from Senior Credit Facilities
|
94,539
|
|
|
355,252
|
|
|
Payments on Commercial Paper
|
(3,815,406
|
)
|
|
(3,976,712
|
)
|
|
Proceeds from Commercial Paper
|
3,895,455
|
|
|
4,089,996
|
|
|
Payments of other debt and financing costs
|
(125
|
)
|
|
—
|
|
|
Change in outstanding checks in excess of cash
|
(10,965
|
)
|
|
(6,905
|
)
|
|
Shares redeemed for taxes
|
(4,669
|
)
|
|
(9,144
|
)
|
|
Proceeds from stock transactions
|
1
|
|
|
1
|
|
|
Net cash provided by financing activities
|
26,800
|
|
|
86,599
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
1,476
|
|
|
1,574
|
|
|
Net change in cash and cash equivalents
|
(13,382
|
)
|
|
29,959
|
|
|
Cash and cash equivalents, beginning of period
|
119,050
|
|
|
84,884
|
|
|
Cash and cash equivalents, end of period
|
$
|
105,668
|
|
|
114,843
|
|
|
|
|
|
•
|
Incremental costs of obtaining a contract is recorded as an expense when incurred in selling, general and administrative expenses if the amortization period is less than one year.
|
•
|
Shipping and handling activities performed after control has been transferred is accounted for as a fulfillment cost in cost of sales.
|
March 30, 2019
|
Global Ceramic segment
|
|
Flooring NA segment
|
|
Flooring ROW segment
|
|
Total
|
|||||
Geographical Markets
|
|
|
|
|
|
|
|
|||||
United States
|
$
|
541,826
|
|
|
883,242
|
|
|
68
|
|
|
1,425,136
|
|
Europe
|
179,310
|
|
|
1,837
|
|
|
469,916
|
|
|
651,063
|
|
|
Russia
|
51,915
|
|
|
29
|
|
|
23,615
|
|
|
75,559
|
|
|
Other
|
125,301
|
|
|
36,872
|
|
|
128,559
|
|
|
290,732
|
|
|
|
$
|
898,352
|
|
|
921,980
|
|
|
622,158
|
|
|
2,442,490
|
|
|
|
|
|
|
|
|
|
|||||
Product Categories
|
|
|
|
|
|
|
|
|||||
Ceramic & Stone
|
$
|
898,352
|
|
|
14,443
|
|
|
—
|
|
|
912,795
|
|
Carpet & Resilient
|
—
|
|
|
735,424
|
|
|
190,929
|
|
|
926,353
|
|
|
Laminate & Wood
|
—
|
|
|
172,113
|
|
|
210,201
|
|
|
382,314
|
|
|
Other (1)
|
—
|
|
|
—
|
|
|
221,028
|
|
|
221,028
|
|
|
|
$
|
898,352
|
|
|
921,980
|
|
|
622,158
|
|
|
2,442,490
|
|
March 31, 2018
|
Global Ceramic segment
|
|
Flooring NA segment
|
|
Flooring ROW segment
|
|
Total
|
|||||
Geographical Markets
|
|
|
|
|
|
|
|
|||||
United States
|
$
|
556,187
|
|
|
908,122
|
|
|
—
|
|
|
1,464,309
|
|
Europe
|
190,235
|
|
|
1,650
|
|
|
494,644
|
|
|
686,529
|
|
|
Russia
|
51,422
|
|
|
—
|
|
|
19,428
|
|
|
70,850
|
|
|
Other
|
78,704
|
|
|
40,586
|
|
|
71,224
|
|
|
190,514
|
|
|
|
$
|
876,548
|
|
|
950,358
|
|
|
585,296
|
|
|
2,412,202
|
|
|
|
|
|
|
|
|
|
|||||
Product Categories
|
|
|
|
|
|
|
|
|||||
Ceramic & Stone
|
$
|
876,548
|
|
|
17,544
|
|
|
—
|
|
|
894,092
|
|
Carpet & Resilient
|
—
|
|
|
755,545
|
|
|
129,011
|
|
|
884,556
|
|
|
Laminate & Wood
|
—
|
|
|
177,269
|
|
|
226,143
|
|
|
403,412
|
|
|
Other (1)
|
—
|
|
|
—
|
|
|
230,142
|
|
|
230,142
|
|
|
|
$
|
876,548
|
|
|
950,358
|
|
|
585,296
|
|
|
2,412,202
|
|
•
|
In connection with acquisition activity, the Company typically incurs costs associated with executing the transactions, integrating the acquired operations (which may include expenditures for consulting and the integration of systems and processes), and restructuring the combined company (which may include charges related to employees, assets and activities that will not continue in the combined company); and
|
•
|
In connection with the Company’s cost-reduction/productivity initiatives, it typically incurs costs and charges associated with site closings and other facility rationalization actions and workforce reductions.
|
|
Three Months Ended
|
|||||
|
March 30, 2019
|
|
March 31, 2018
|
|||
Cost of sales
|
|
|
|
|||
Restructuring costs (1)
|
$
|
31,535
|
|
|
14,090
|
|
Acquisition integration-related costs
|
1,067
|
|
|
408
|
|
|
Restructuring and acquisition integration-related costs
|
$
|
32,602
|
|
|
14,498
|
|
|
|
|
|
|||
Selling, general and administrative expenses
|
|
|
|
|||
Restructuring costs (1)
|
$
|
1,402
|
|
|
4,092
|
|
Acquisition transaction-related costs
|
280
|
|
|
—
|
|
|
Acquisition integration-related costs
|
1,419
|
|
|
3,514
|
|
|
Restructuring, acquisition transaction and integration-related costs
|
$
|
3,101
|
|
|
7,606
|
|
|
Lease
impairments
|
|
Asset write-downs
|
|
Severance
|
|
Other
restructuring
costs
|
|
Total
|
||||||
Balance as of December 31, 2018
|
$
|
397
|
|
|
—
|
|
|
7,866
|
|
|
250
|
|
|
8,513
|
|
Provision - Global Ceramic segment
|
—
|
|
|
—
|
|
|
4,879
|
|
|
—
|
|
|
4,879
|
|
|
Provision - Flooring NA segment
|
—
|
|
|
23,688
|
|
|
598
|
|
|
3,313
|
|
|
27,599
|
|
|
Provision - Flooring ROW segment
|
—
|
|
|
—
|
|
|
459
|
|
|
—
|
|
|
459
|
|
|
Cash payments
|
(145
|
)
|
|
—
|
|
|
(2,733
|
)
|
|
(3,313
|
)
|
|
(6,191
|
)
|
|
Non-cash items
|
—
|
|
|
(23,688
|
)
|
|
(17
|
)
|
|
—
|
|
|
(23,705
|
)
|
|
Balance as of March 30, 2019
|
$
|
252
|
|
|
—
|
|
|
11,052
|
|
|
250
|
|
|
11,554
|
|
|
March 30,
2019 |
|
December 31,
2018 |
|||
Customers, trade
|
$
|
1,716,927
|
|
|
1,562,284
|
|
Income tax receivable
|
10,735
|
|
|
17,217
|
|
|
Other
|
88,227
|
|
|
101,376
|
|
|
|
1,815,889
|
|
|
1,680,877
|
|
|
Less: allowance for discounts, claims and doubtful accounts
|
72,308
|
|
|
74,718
|
|
|
Receivables, net
|
$
|
1,743,581
|
|
|
1,606,159
|
|
|
March 30,
2019 |
|
December 31,
2018 |
|||
Finished goods
|
$
|
1,625,685
|
|
|
1,582,112
|
|
Work in process
|
166,753
|
|
|
165,616
|
|
|
Raw materials
|
545,687
|
|
|
539,887
|
|
|
Total inventories
|
$
|
2,338,125
|
|
|
2,287,615
|
|
|
Global Ceramic segment
|
|
Flooring NA segment
|
|
Flooring ROW segment
|
|
Total
|
|||||
Balance as of December 31, 2018
|
|
|
|
|
|
|
|
|||||
Goodwill
|
$
|
1,564,987
|
|
|
874,198
|
|
|
1,409,206
|
|
|
3,848,391
|
|
Accumulated impairment losses
|
(531,930
|
)
|
|
(343,054
|
)
|
|
(452,441
|
)
|
|
(1,327,425
|
)
|
|
|
1,033,057
|
|
|
531,144
|
|
|
956,765
|
|
|
2,520,966
|
|
|
|
|
|
|
|
|
|
|
|||||
Goodwill recognized during the period
|
(2,889
|
)
|
|
—
|
|
|
45,931
|
|
|
43,042
|
|
|
Currency translation during the period
|
1,752
|
|
|
—
|
|
|
(16,763
|
)
|
|
(15,011
|
)
|
|
|
|
|
|
|
|
|
|
|||||
Balance as of March 30, 2019
|
|
|
|
|
|
|
|
|||||
Goodwill
|
1,563,850
|
|
|
874,198
|
|
|
1,438,374
|
|
|
3,876,422
|
|
|
Accumulated impairment losses
|
(531,930
|
)
|
|
(343,054
|
)
|
|
(452,441
|
)
|
|
(1,327,425
|
)
|
|
|
$
|
1,031,920
|
|
|
531,144
|
|
|
985,933
|
|
|
2,548,997
|
|
|
Tradenames
|
||
Balance as of December 31, 2018
|
$
|
707,380
|
|
Intangible assets acquired during the period
|
(874
|
)
|
|
Currency translation during the period
|
(3,732
|
)
|
|
Balance as of March 30, 2019
|
$
|
702,774
|
|
Gross carrying amounts:
|
Customer
relationships |
|
Patents
|
|
Other
|
|
Total
|
|||||
Balance as of December 31, 2018
|
$
|
651,012
|
|
|
254,483
|
|
|
6,535
|
|
|
912,030
|
|
Intangible assets recognized during the period
|
2,092
|
|
|
—
|
|
|
—
|
|
|
2,092
|
|
|
Currency translation during the period
|
(6,758
|
)
|
|
(5,015
|
)
|
|
74
|
|
|
(11,699
|
)
|
|
Balance as of March 30, 2019
|
$
|
646,346
|
|
|
249,468
|
|
|
6,609
|
|
|
902,423
|
|
|
|
|
|
|
|
|
|
|||||
Accumulated amortization:
|
Customer
relationships |
|
Patents
|
|
Other
|
|
Total
|
|||||
Balance as of December 31, 2018
|
$
|
406,386
|
|
|
249,988
|
|
|
1,227
|
|
|
657,601
|
|
Amortization during the period
|
6,194
|
|
|
533
|
|
|
2
|
|
|
6,729
|
|
|
Currency translation during the period
|
(4,772
|
)
|
|
(4,920
|
)
|
|
(5
|
)
|
|
(9,697
|
)
|
|
Balance as of March 30, 2019
|
$
|
407,808
|
|
|
245,601
|
|
|
1,224
|
|
|
654,633
|
|
|
|
|
|
|
|
|
|
|||||
Intangible assets subject to amortization, net
|
$
|
238,538
|
|
|
3,867
|
|
|
5,385
|
|
|
247,790
|
|
|
Three Months Ended
|
|||||
|
March 30,
2019 |
|
March 31,
2018 |
|||
Amortization expense
|
$
|
6,729
|
|
|
7,567
|
|
|
March 30,
2019 |
|
December 31,
2018 |
|||
Outstanding checks in excess of cash
|
$
|
3,626
|
|
|
14,624
|
|
Accounts payable, trade
|
914,205
|
|
|
811,879
|
|
|
Accrued expenses
|
407,386
|
|
|
430,431
|
|
|
Product warranties
|
46,129
|
|
|
47,511
|
|
|
Accrued interest
|
7,197
|
|
|
21,908
|
|
|
Accrued compensation and benefits
|
192,730
|
|
|
197,513
|
|
|
Total accounts payable and accrued expenses
|
$
|
1,571,273
|
|
|
1,523,866
|
|
|
Foreign currency translation adjustments
|
|
Pensions, net of tax
|
|
Total
|
||||
Balance as of December 31, 2018
|
$
|
(782,102
|
)
|
|
(9,506
|
)
|
|
(791,608
|
)
|
Current period other comprehensive income
|
13,953
|
|
|
108
|
|
|
14,061
|
|
|
Balance as of March 30, 2019
|
$
|
(768,149
|
)
|
|
(9,398
|
)
|
|
(777,547
|
)
|
Three Months Ended March 30, 2019
|
Cost of Goods Sold
|
|
Selling, General and Administrative
|
|
Total
|
||||
Operating lease costs
|
|
|
|
|
|
||||
Fixed
|
$
|
7,688
|
|
|
24,455
|
|
|
32,143
|
|
Short-term
|
1,439
|
|
|
2,909
|
|
|
4,348
|
|
|
Variable
|
2,278
|
|
|
5,200
|
|
|
7,478
|
|
|
Sub-leases
|
(84
|
)
|
|
(133
|
)
|
|
(217
|
)
|
|
|
11,321
|
|
|
32,431
|
|
|
43,752
|
|
|
Finance lease costs
|
|
|
|
|
|
||||
Amortization of leased assets
|
—
|
|
|
432
|
|
|
432
|
|
|
Interest on lease liabilities
|
—
|
|
|
31
|
|
|
31
|
|
|
|
—
|
|
|
463
|
|
|
463
|
|
|
Net lease costs
|
$
|
11,321
|
|
|
32,894
|
|
|
44,215
|
|
|
Classification
|
|
March 30,
2019 |
||
Assets
|
|
|
|
||
Operating Leases
|
|
|
|
||
Right of use operating lease assets
|
Right of use operating lease assets
|
|
$
|
320,800
|
|
Finance Leases
|
|
|
|
||
Property, plant and equipment, gross
|
Property, plant and equipment
|
|
9,086
|
|
|
Accumulated depreciation
|
Accumulated depreciation
|
|
(2,817
|
)
|
|
Property, plant and equipment, net
|
Property, plant and equipment, net
|
|
6,269
|
|
|
Total lease assets
|
|
|
$
|
327,069
|
|
|
|
|
|
||
Liabilities
|
|
|
|
||
Operating Leases
|
|
|
|
||
Other current
|
Current operating lease liabilities
|
|
$
|
99,642
|
|
Non-current
|
Non-current operating lease liabilities
|
|
227,595
|
|
|
Total operating liabilities
|
|
|
327,237
|
|
|
Finance Leases
|
|
|
|
||
Short-term debt
|
Short-term debt and current portion of long-term debt
|
|
1,179
|
|
|
Long-term debt
|
Long-term debt, less current portion
|
|
5,130
|
|
|
Total finance liabilities
|
|
|
6,309
|
|
|
Total lease liabilities
|
|
|
$
|
333,546
|
|
|
|
|
|
Year ending December 31,
|
Finance
Leases
|
|
Operating
Leases
|
|
Total
|
||||
2019 (excluding the three months ended March 30, 2019)
|
$
|
932
|
|
|
81,796
|
|
|
82,728
|
|
2020
|
1,028
|
|
|
100,986
|
|
|
102,014
|
|
|
2021
|
608
|
|
|
72,184
|
|
|
72,792
|
|
|
2022
|
412
|
|
|
46,168
|
|
|
46,580
|
|
|
2023
|
412
|
|
|
23,123
|
|
|
23,535
|
|
|
Thereafter
|
3,388
|
|
|
30,289
|
|
|
33,677
|
|
|
Total lease payments
|
6,780
|
|
|
354,546
|
|
|
361,326
|
|
|
Less imputed interest
|
471
|
|
|
27,309
|
|
|
|
||
Present value, Total
|
$
|
6,309
|
|
|
327,237
|
|
|
|
|
March 30,
2019 |
|
Weighted Average Remaining Lease Term
|
|
|
Operating Leases
|
4.16 years
|
|
Finance Leases
|
8.89 years
|
|
|
|
|
Weighted Average Discount Rate
|
|
|
Operating Leases
|
3.3
|
%
|
Finance Leases
|
2.1
|
%
|
|
Three Months Ended
|
||
|
March 30,
2019 |
||
Cash paid for amounts included in measurement of lease liabilities:
|
|
||
Operating cash flows from operating leases
|
$
|
31,557
|
|
Operating cash flows from finance leases
|
31
|
|
|
Financing cash flows from finance leases
|
371
|
|
|
Right-of-use assets obtained in exchange for lease obligations:
|
|
||
Operating Leases
|
22,243
|
|
|
Finance Leases
|
—
|
|
|
Amortization:
|
|
||
Amortization of Right of use operating lease assets (1)
|
28,641
|
|
|
Three Months Ended
|
|||||
|
March 30,
2019 |
|
March 31,
2018 |
|||
Foreign currency losses (gains), net
|
$
|
(1,110
|
)
|
|
1,405
|
|
Release of indemnification asset
|
—
|
|
|
1,749
|
|
|
All other, net
|
(2,626
|
)
|
|
844
|
|
|
Total other expense, net
|
$
|
(3,736
|
)
|
|
3,998
|
|
|
|
Total Stockholders’ Equity
|
||||||||||||||||||||||||||
|
Redeemable
Noncontrolling
Interest
|
Common Stock
|
Additional
Paid-in
Capital
|
Retained
Earnings
|
Accumulated
Other
Comprehensive
Income (Loss)
|
Treasury Stock
|
Noncontrolling Interest
|
Total
Stockholders’
Equity
|
||||||||||||||||||||
|
Shares
|
Amount
|
Shares
|
Amount
|
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
January 1, 2019
|
$
|
—
|
|
79,656
|
|
$
|
797
|
|
$
|
1,852,173
|
|
$
|
6,588,197
|
|
$
|
(791,608
|
)
|
(7,349
|
)
|
$
|
(215,745
|
)
|
$
|
6,245
|
|
$
|
7,440,059
|
|
Shares issued under employee and director stock plans
|
—
|
|
115
|
|
1
|
|
(4,478
|
)
|
—
|
|
—
|
|
—
|
|
29
|
|
—
|
|
(4,448
|
)
|
||||||||
Stock-based compensation expense
|
—
|
|
—
|
|
—
|
|
5,789
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
5,789
|
|
||||||||
Accretion of redeemable noncontrolling interest
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||
Noncontrolling earnings
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(10
|
)
|
(10
|
)
|
||||||||
Currency translation adjustment on non-controlling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||
Currency translation adjustment
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
13,953
|
|
—
|
|
—
|
|
9
|
|
13,962
|
|
||||||||
Prior pension and post-retirement benefit service cost and actuarial gain / loss
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
108
|
|
—
|
|
—
|
|
—
|
|
108
|
|
||||||||
Net income
|
—
|
|
—
|
|
—
|
|
—
|
|
121,585
|
|
—
|
|
—
|
|
—
|
|
—
|
|
121,585
|
|
||||||||
March 30, 2019
|
$
|
—
|
|
79,771
|
|
$
|
798
|
|
$
|
1,853,484
|
|
$
|
6,709,782
|
|
$
|
(777,547
|
)
|
(7,349
|
)
|
$
|
(215,716
|
)
|
$
|
6,244
|
|
$
|
7,577,045
|
|
|
|
Total Stockholders’ Equity
|
||||||||||||||||||||||||||
|
Redeemable
Noncontrolling
Interest
|
Common Stock
|
Additional
Paid-in
Capital
|
Retained
Earnings
|
Accumulated
Other
Comprehensive
Income (Loss)
|
Treasury Stock
|
Noncontrolling Interest
|
Total
Stockholders’
Equity
|
||||||||||||||||||||
|
Shares
|
Amount
|
Shares
|
Amount
|
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
January 1, 2018
|
$
|
29,463
|
|
81,771
|
|
$
|
818
|
|
$
|
1,828,131
|
|
$
|
6,004,506
|
|
$
|
(558,527
|
)
|
(7,350
|
)
|
$
|
(215,766
|
)
|
$
|
7,847
|
|
$
|
7,067,009
|
|
Shares issued under employee and director stock plans
|
—
|
|
112
|
|
1
|
|
(9,004
|
)
|
—
|
|
—
|
|
—
|
|
17
|
|
—
|
|
(8,986
|
)
|
||||||||
Stock-based compensation expense
|
—
|
|
—
|
|
—
|
|
7,948
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
7,948
|
|
||||||||
Accretion of redeemable noncontrolling interest
|
305
|
|
—
|
|
—
|
|
—
|
|
(305
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(305
|
)
|
||||||||
Noncontrolling earnings
|
444
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
31
|
|
31
|
|
||||||||
Currency translation adjustment on non-controlling interests
|
711
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
188
|
|
188
|
|
||||||||
Currency translation adjustment
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
71,494
|
|
—
|
|
—
|
|
—
|
|
71,494
|
|
||||||||
Prior pension and post-retirement benefit service cost and actuarial gain / loss
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(135
|
)
|
—
|
|
—
|
|
—
|
|
(135
|
)
|
||||||||
Net income
|
—
|
|
—
|
|
—
|
|
—
|
|
208,766
|
|
—
|
|
—
|
|
—
|
|
—
|
|
208,766
|
|
||||||||
March 31, 2018
|
$
|
30,924
|
|
81,883
|
|
$
|
819
|
|
$
|
1,827,075
|
|
$
|
6,212,966
|
|
$
|
(487,168
|
)
|
(7,350
|
)
|
$
|
(215,749
|
)
|
$
|
8,066
|
|
$
|
7,346,009
|
|
|
Three Months Ended
|
|||||
|
March 30,
2019 |
|
March 31,
2018 |
|||
Net earnings attributable to Mohawk Industries, Inc.
|
$
|
121,585
|
|
|
208,766
|
|
Accretion of redeemable noncontrolling interest (1)
|
—
|
|
|
(305
|
)
|
|
Net earnings available to common stockholders
|
$
|
121,585
|
|
|
208,461
|
|
|
|
|
|
|||
Weighted-average common shares outstanding-basic and diluted:
|
|
|
|
|||
Weighted-average common shares outstanding—basic
|
72,342
|
|
|
74,453
|
|
|
Add weighted-average dilutive potential common shares—options to purchase common shares and RSUs, net
|
304
|
|
|
476
|
|
|
Weighted-average common shares outstanding-diluted
|
72,646
|
|
|
74,929
|
|
|
|
|
|
|
|||
Earnings per share attributable to Mohawk Industries, Inc.
|
|
|
|
|||
Basic
|
$
|
1.68
|
|
|
2.80
|
|
Diluted
|
$
|
1.67
|
|
|
2.78
|
|
|
Three Months Ended
|
|||||
|
March 30,
2019 |
|
March 31,
2018 |
|||
Net sales:
|
|
|
|
|||
Global Ceramic segment
|
$
|
898,352
|
|
|
876,548
|
|
Flooring NA segment
|
921,980
|
|
|
950,358
|
|
|
Flooring ROW segment
|
622,158
|
|
|
585,296
|
|
|
Intersegment sales
|
—
|
|
|
—
|
|
|
Total
|
$
|
2,442,490
|
|
|
2,412,202
|
|
|
|
|
|
|||
Operating income (loss):
|
|
|
|
|||
Global Ceramic segment
|
$
|
84,335
|
|
|
113,417
|
|
Flooring NA segment
|
649
|
|
|
74,748
|
|
|
Flooring ROW segment
|
90,431
|
|
|
89,060
|
|
|
Corporate and intersegment eliminations
|
(10,085
|
)
|
|
(8,826
|
)
|
|
Total
|
$
|
165,330
|
|
|
268,399
|
|
|
March 30,
2019 |
|
December 31,
2018 |
|||
Assets:
|
|
|
|
|||
Global Ceramic segment
|
$
|
5,503,807
|
|
|
5,194,030
|
|
Flooring NA segment
|
4,020,336
|
|
|
3,938,639
|
|
|
Flooring ROW segment
|
3,799,591
|
|
|
3,666,617
|
|
|
Corporate and intersegment eliminations
|
281,341
|
|
|
299,837
|
|
|
Total
|
$
|
13,605,075
|
|
|
13,099,123
|
|
|
March 30, 2019
|
|
December 31, 2018
|
|||||||||
|
Fair Value
|
|
Carrying
Value
|
|
Fair Value
|
|
Carrying
Value
|
|||||
3.85% senior notes, payable February 1, 2023; interest payable semiannually
|
$
|
618,582
|
|
|
600,000
|
|
|
599,904
|
|
|
600,000
|
|
2.00% senior notes, payable January 14, 2022; interest payable annually
|
583,744
|
|
|
560,915
|
|
|
587,487
|
|
|
572,148
|
|
|
Floating Rate Notes, payable May 18, 2020, interest payable quarterly
|
336,286
|
|
|
336,549
|
|
|
343,004
|
|
|
343,289
|
|
|
Floating Rate Notes, payable September 11, 2019, interest payable quarterly
|
336,751
|
|
|
336,549
|
|
|
343,560
|
|
|
343,289
|
|
|
U.S. commercial paper
|
688,000
|
|
|
688,000
|
|
|
632,668
|
|
|
632,668
|
|
|
European commercial paper
|
717,411
|
|
|
717,411
|
|
|
707,175
|
|
|
707,175
|
|
|
Five-year senior secured credit facility, due March 26, 2022
|
20,193
|
|
|
20,193
|
|
|
57,896
|
|
|
57,896
|
|
|
Capital leases and other
|
6,310
|
|
|
6,310
|
|
|
6,664
|
|
|
6,664
|
|
|
Unamortized debt issuance costs
|
(4,620
|
)
|
|
(4,620
|
)
|
|
(5,155
|
)
|
|
(5,155
|
)
|
|
Total debt
|
3,302,657
|
|
|
3,261,307
|
|
|
3,273,203
|
|
|
3,257,974
|
|
|
Less current portion of long-term debt and commercial paper
|
1,763,332
|
|
|
1,763,332
|
|
|
1,742,373
|
|
|
1,742,373
|
|
|
Long-term debt, less current portion
|
$
|
1,539,325
|
|
|
1,497,975
|
|
|
1,530,830
|
|
|
1,515,601
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Period
|
Total Number of Shares Purchased in Millions
|
Average Price Paid per Share
|
Total Number of Shares Purchased as Part of Publicly Announced Plan in Millions
|
Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plan in Millions
|
||||||
January 1 through February 2, 2019
|
—
|
|
$
|
—
|
|
—
|
|
$
|
225.9
|
|
February 3 through March 2, 2019
|
—
|
|
$
|
—
|
|
—
|
|
$
|
225.9
|
|
March 3 through March 31, 2019
|
—
|
|
$
|
—
|
|
—
|
|
$
|
225.9
|
|
Total
|
—
|
|
$
|
—
|
|
—
|
|
|
Item 3.
|
Defaults Upon Senior Securities
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Other Information
|
Item 6.
|
Exhibits
|
No.
|
|
Description
|
|
|
|
31.1
|
|
|
31.2
|
|
|
32.1
|
|
|
32.2
|
|
|
95.1
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
|
|
|
MOHAWK INDUSTRIES, INC.
|
|
|
|
|
(Registrant)
|
|
|
|
|
|
Dated:
|
May 3, 2019
|
By:
|
|
/s/ Jeffrey S. Lorberbaum
|
|
|
|
|
JEFFREY S. LORBERBAUM
|
|
|
|
|
Chairman and Chief Executive Officer
|
|
|
|
|
(principal executive officer)
|
|
|
|
|
|
Dated:
|
May 3, 2019
|
By:
|
|
/s/ Glenn Landau
|
|
|
|
|
GLENN LANDAU
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
(principal financial officer)
|
1.
|
|
I have reviewed this quarterly report on Form 10-Q of Mohawk Industries, Inc.;
|
2.
|
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Jeffrey S. Lorberbaum
|
Jeffrey S. Lorberbaum
|
Chairman and Chief Executive Officer
|
1.
|
|
I have reviewed this quarterly report on Form 10-Q of Mohawk Industries, Inc.;
|
2.
|
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Glenn Landau
|
Glenn Landau
|
Chief Financial Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Jeffrey S. Lorberbaum
|
Jeffrey S. Lorberbaum
|
Chairman and Chief Executive Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Glenn Landau
|
Glenn Landau
|
Chief Financial Officer
|
Mine
(Federal Mine Safety and Health Administration (MSHA) ID)
|
Total # of Significant & Substantial violations under §104(a)
|
Total # of orders under §104(b)
|
Total # of unwarrantable failure citations and orders under §104(d)
|
Total # of violations under §110(b)(2)
|
Total # of orders under §107(a)
|
Total dollar value of proposed assessments from MSHA ($ in thousands)
|
Total # of mining related fatalities
|
Received Notice of Pattern of Violations under §104(e) (yes/no)?
|
Received Notice of Potential to have Pattern under §104(e) (yes/no)?
|
Total # of Legal Actions Pending with the Mine Safety and Health Review Commission as of the Last Day of Period
|
Legal Actions Initiated or Resolved During Period
|
TP Claims 1&2/Rosa Blanca (4100867)
|
1
|
—
|
—
|
—
|
—
|
$—
|
—
|
No
|
No
|
—
|
—
|
Allamore Mill (4100869)
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
No
|
No
|
—
|
—
|
Wild Horse Plant (4101527)
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
No
|
No
|
—
|
—
|