FALSE000085196800008519682023-10-262023-10-26

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 26, 2023

MohawkIND Logo - FINAL (002).jpg
MOHAWK INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
 
Delaware
01-13697
52-1604305
(State or other jurisdiction of
incorporation or organization)		(Commission File Number)(I.R.S. Employer
Identification No.)
160 S. Industrial Blvd., Calhoun, Georgia
30701
(Address of principal executive offices)(Zip Code)

Registrant’s telephone number, including area code: (706) 629-7721

(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐  Written communication pursuant to Rule 425 under Securities Act (17 CFR 230.425)
☐   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (CFR 240.14d-2(b))
☐   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (CFR 240.17R 240.13e-4(c))

Securities Registered Pursuant to Section 12(b) of the Act:
Title of Each ClassTrading SymbolName of Each Exchange on Which Registered
Common Stock, $.01 par valueMHKNew York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company    ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐





Item 2.02 Results of Operations and Financial Condition.

The information in this Item 2.02, including Exhibit 99.1 attached hereto, is being furnished pursuant to Item 2.02 and shall not be deemed “filed” for purpose of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

On October 26, 2023, Mohawk Industries, Inc. (the "Company") issued a press release to report the Company’s earnings for the fiscal quarter ended September 30, 2023, which is attached to this report as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits


104 Interactive Data File


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
Mohawk Industries, Inc.
Date:
October 26, 2023
By:
/s/ William W. Harkins
William W. Harkins
Chief Accounting Officer and Corporate Controller






INDEX TO EXHIBITS

Exhibit
99.1
104Interactive Data File




NEWS RELEASE


For Release:    Immediately

Contact:    James Brunk, Chief Financial Officer
        (706) 624-2239


MOHAWK INDUSTRIES REPORTS Q3 RESULTS

Calhoun, Georgia, October 26, 2023 — Mohawk Industries, Inc. (NYSE: MHK) today announced a third quarter 2023 net loss of $760 million and a loss per share of $11.94 with the impact of non-cash impairment charges of $876 million. The Company’s current market capitalization along with continued challenging macroeconomic conditions and higher discount rates prompted a review of its goodwill and intangible asset balances, which resulted in the impairment charges. Adjusted net earnings were $174 million, and adjusted earnings per share (“EPS”) were $2.72, excluding impairment and other non-recurring charges. Net sales for the third quarter of 2023 were $2.8 billion, a decrease of 5.2% as reported and 8.1% on a legacy and constant currency and days basis versus the prior year. During the third quarter of 2022, the Company reported net sales of $2.9 billion, a net loss of $534 million and a loss per share of $8.40. Adjusted net earnings were $212 million, and adjusted EPS was $3.34, excluding impairment and other non-recurring charges.
For the nine-month period ending September 30, 2023, the Company reported a net loss and loss per share of $579 million and $9.10, respectively. Adjusted net earnings were $462 million, and adjusted EPS was $7.23, excluding impairment and other non-recurring charges. For the first nine months of 2023, net sales were $8.5 billion, a decrease of 6.2% as reported and 8.7% on a legacy and constant currency and days basis versus the prior year. For the nine-month period ending October 1, 2022, the Company reported net sales of $9.1 billion, a net loss of $8 million and a loss per share of $0.13; adjusted net earnings were $739 million, and adjusted EPS was $11.56, excluding impairment and other non-recurring charges.
Commenting on the Company’s third quarter results, Chairman and CEO Jeff Lorberbaum stated, “Our results for the quarter were in line with our expectations as our industry faced continued pressures across all regions, primarily due to constrained residential investments and further tightening of consumer discretionary spending. Our third quarter performance was seasonally impacted by vacations in Europe, which reduced our sales and earnings versus the prior quarter. Lower material and energy costs offset the decline in both price and mix. We also faced foreign exchange headwinds of approximately $20 million on operating income or $0.25 on


EPS. Across the business, we benefited from cost reductions, productivity initiatives and lower input costs. We are managing our working capital and generated strong free cash flow of $385 million in the quarter and $660 million for the year to date.
During the quarter, central banks around the world continued to raise interest rates to slow down their economies and reduce inflation. Their actions are affecting new construction and remodeling in both residential and commercial channels, postponing spending on new projects. In the U.S., mortgage rates have climbed to their highest level in more than two decades, which has suppressed the housing market and limited home renovation activity. In Europe, consumers are postponing large purchases like flooring as a result of higher energy costs, inflation and uncertainty due to the war in Ukraine. Our industry faces a greater impact from these pressures than other sectors given that most flooring purchases can be deferred. With the high fixed costs required to produce flooring, competition increases as the industry slows and participants attempt to increase their sales to maximize absorption. As a result, our average selling prices and mix have declined, with the impact offset by lower material and energy costs, restructuring benefits and process improvements.
The predicted timing of the housing sector recovery continues to be postponed, and we are managing the business to optimize our results and cash flow until it occurs. We are taking actions to increase our volumes while managing margins and operating expenses. We have launched differentiated collections, selectively introduced promotions and expanded our participation in the new construction channel. To further enhance our competitive position, we will shut down older ceramic production in Italy, and we are converting our U.S. rigid LVT production to a direct extrusion process. These restructuring initiatives will result in a non-recurring charge of approximately $55 million, of which $50 million is non-cash. When completed, these initiatives should improve our profitability by $30 million annually by enhancing our productivity, lowering our manufacturing costs and optimizing our production flexibility.
Our European expansions in insulation and porcelain slabs are currently in operation, and our U.S. premium laminate and LVT projects are continuing to start up. Expanded production in European laminate and U.S. quartz countertops should begin in the second half of 2024. As the integration of our acquisitions in Mexico and Brazil proceeds, we have consolidated general management, sales and administrative functions, while enhancing the companies’ product offering, operational efficiencies and customer base. While the Mexican and Brazilian markets are experiencing reduced demand and margins, we anticipate gaining additional benefits from our acquisitions as these markets recover.


For the third quarter, the Global Ceramic Segment reported a 0.5% decline in net sales as reported, or a 6.0% decline on a legacy and constant currency and days basis. The Segment’s operating margin was negative 32.5% as reported, or 8.0% on an adjusted basis, as a result of unfavorable price and product mix, temporary plant shutdowns, lower volumes and foreign exchange headwinds, partially offset by productivity gains. Our U.S. ceramic business outperformed due to our innovative product introductions and higher service levels. With this, we expanded our positions in the new home construction and commercial channels. Our investments in new decorating technology, polishing and mosaics are providing domestic alternatives to premium imported ceramic. To further expand our quartz countertop sales, we are introducing more stylized collections made utilizing new technologies that provide greater value. In Europe, retail traffic and new construction are being affected by economic uncertainty. To gain sales, we are responding with specific price promotions by geography and channel. Natural gas prices have declined more than 80% from their peak, and we have reset our pricing to align with energy costs. Sales of our premium porcelain slabs continue to grow, and we are optimizing our recent capacity expansion. In Latin America, we have reduced our cost structures to adapt to slower, more competitive markets, with Mexico being less affected. As we integrate our acquisitions, we are gaining customer commitments to expand sales across all channels and price points using the combined product portfolio.
During the third quarter, our Flooring Rest of the World Segment’s net sales decreased by 2.6% as reported, or 5.0% on a legacy and constant currency basis. The Segment’s operating margin was negative 22.4% as reported, or 10.9% on an adjusted basis, improving over prior year as it benefited from raw materials, energy and less downtime, offsetting unfavorable price, mix and foreign exchange. Sheet vinyl continues to outperform other flooring categories, and we have increased production to meet the higher demand. Our laminate and LVT sales are under pressure in the softer market, and we are introducing new products, merchandising and select promotions to optimize volumes. We have executed the restructuring to support the conversion of our residential LVT offering from flexible to rigid cores, which is positively impacting sales. Our panels business has slowed due to a decline in remodeling activity, construction projects and industrial demand. Sales of our higher margin HPL panel collections are growing as our customer base expands. Our insulation volume in the third quarter improved, and our margins were in line with last year. Insulation industry pricing has declined along with input costs, with regional variation caused by new plants coming online. In Australia and New Zealand, the industry slowed during the quarter, and our sales in both countries were down slightly. To increase


sales and protect our margins, we are introducing enhanced collections across fiber categories, elevating the marketing of our high-end products and implementing targeted promotions to meet evolving demand.
In the third quarter, our Flooring North America Segment sales declined 11.7% as reported or 12.2% on a legacy basis. The Segment’s operating margin was negative 17.4% as reported, or 8.1% on an adjusted basis, as a result of unfavorable pricing and product mix, reduced volume and lower productivity due to the underutilization of plant assets, partially offset by lower inflation. Competition increased across all product categories, and, to enhance sales, we continued to invest in new products and merchandising systems to expand our retail presence. We also increased our participation in the new home construction channel with regional and national builders. We are implementing many projects to reduce costs, improve efficiencies and maximize material utilization. In residential carpet, to improve our mix, we are expanding our premium collections, which provide superior styling and features. For value conscious homeowners, we are increasing our environmentally friendly recycled polyester offering. Our sheet vinyl collections continue to perform well with budget-oriented consumers. As an alternative to PVC-based LVT products, we introduced a new resilient polymer core that is more environmentally friendly and scratch resistant. We are continuing to ramp up our West Coast LVT production and the new extrusion process in Georgia, with both expected to be substantially operational in the first quarter of 2024. We are expanding distribution of laminate in the retail and builder channels, and our new laminate collections have been well received as consumers seek premium visuals at accessible price points.
In the present industry downturn, we are managing the controllable aspects of our business while adjusting to regional market conditions. In all of our geographies, elevated interest rates and persistent inflation are restricting consumer discretionary spending, resulting in postponed remodeling projects and new home purchases. Similar pressures are beginning to reduce commercial investments as business sentiment declines. Competition for sales to utilize plant capacity is increasing in all of our markets, and lower input costs should offset the impact. With enhanced products and merchandising, selective promotions and expanding participation in the best performing sales channels, we are maximizing our volumes while managing our margins and operating expenses. Across the enterprise, we are implementing productivity, cost reduction and restructuring initiatives to lower our expenses and improve our results. We continue to manage our working capital to optimize our cash flow. We expect foreign exchange rates to continue to be an earnings headwind. Given these factors, we anticipate our fourth quarter adjusted EPS to be between $1.80 to $1.90, excluding any non-recurring charges. With this, our 2023 full year adjusted EPS should exceed $9.00.


Historically, the flooring industry undergoes greater cyclical peaks and troughs than other building products due to its postponable nature. Our business fundamentals remain strong, and we will benefit from significant pent-up demand when the industry rebounds. Given the aging U.S. housing stock, more than 80% of homeowners who responded to recent JP Morgan surveys indicated they are planning renovation projects in the near term. In addition, after years of construction trailing demand, substantial new home building will be required for many years to come. Commercial activity will expand as the economic outlook improves. As the world’s largest flooring provider, Mohawk is well positioned to capitalize on these opportunities.”

###

ABOUT MOHAWK INDUSTRIES
Mohawk Industries is the leading global flooring manufacturer that creates products to enhance residential and commercial spaces around the world. Mohawk’s vertically integrated manufacturing and distribution processes provide competitive advantages in the production of carpet, rugs, ceramic tile, laminate, wood, stone and vinyl flooring. Our industry leading innovation has yielded products and technologies that differentiate our brands in the marketplace and satisfy all remodeling and new construction requirements. Our brands are among the most recognized in the industry and include American Olean, Daltile, Durkan, Eliane, Elizabeth, Feltex, GH Commercial, Godfrey Hirst, Grupo Daltile, IVC Commercial, IVC Home, Karastan, Marazzi, Mohawk, Mohawk Group, Mohawk Home, Pergo, Quick-Step, Unilin and Vitromex. During the past decade, Mohawk has transformed its business from an American carpet manufacturer into the world’s largest flooring company with operations in Australia, Brazil, Canada, Europe, Malaysia, Mexico, New Zealand, Russia and the United States.
Certain of the statements in the immediately preceding paragraphs, particularly anticipating future performance, business prospects, growth and operating strategies and similar matters and those that include the words “could,” “should,” “believes,” “anticipates,” “expects,” and “estimates,” or similar expressions constitute “forward-looking statements.” For those statements, Mohawk claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. There can be no assurance that the forward-looking statements will be accurate because they are based on many assumptions, which involve risks and uncertainties. The following important factors could cause future results to differ: changes in economic or industry conditions; competition; inflation and deflation in freight, raw material prices and other input costs; inflation and deflation in consumer markets; currency fluctuations; energy costs and supply; timing and level of capital expenditures; timing and implementation of price increases for the Company’s products; impairment charges; integration of acquisitions; international operations; introduction of new products; rationalization of operations; taxes and tax reform; product and other claims; litigation; the risks and uncertainty related to the COVID-19 pandemic; regulatory and political changes in the jurisdictions in which the Company does business; and other risks identified in Mohawk’s SEC reports and public announcements.

Conference call Friday, October 27, 2023, at 11:00 AM Eastern Time
To participate in the conference call via the Internet, please visit http://ir.mohawkind.com/events/event-details/mohawk-industries-inc-3rd-quarter-2023-earnings-call. To participate in the conference call via telephone, register in advance at https://dpregister.com/sreg/4129026795/18d03660587a8 to receive a unique personal identification number or dial 1-833-630-1962 for U.S./Canada and 1-412-317-1843 for international/local on the day of the call for operator assistance. A replay will be available until November 24, 2023, by dialing 1-877-344-7529 for U.S./Canada calls and 1-412-317-0088 for international/local calls and entering access code #9747702.


MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months EndedNine Months Ended
(Amounts in thousands, except per share data)September 30, 2023October 1, 2022September 30, 2023October 1, 2022
Net sales$2,766,186 2,917,539 8,522,837 9,086,390 
Cost of sales2,074,179 2,203,878 6,455,479 6,697,404 
    Gross profit692,007 713,661 2,067,358 2,388,986 
Selling, general and administrative expenses549,641 523,479 1,646,156 1,510,076 
Impairment of goodwill and indefinite-lived intangibles876,108 695,771 876,108 695,771 
Operating income (loss)(733,742)(505,589)(454,906)183,139 
Interest expense20,144 13,797 60,138 37,337 
Other (income), net(8,551)(1,242)(6,902)(1,622)
Earnings (loss) before income taxes(745,335)(518,144)(508,142)147,424 
Income tax expense14,954 15,569 70,657 155,193 
    Net earnings (loss) including noncontrolling interests(760,289)(533,713)(578,799)(7,769)
Net earnings attributable to noncontrolling interests170 256 205 440 
Net earnings (loss) attributable to Mohawk Industries, Inc.$(760,459)(533,969)(579,004)(8,209)
Basic earnings (loss) per share attributable to Mohawk Industries, Inc.$(11.94)(8.40)(9.10)(0.13)
Weighted-average common shares outstanding - basic63,682 63,534 63,648 63,923 
Diluted earnings (loss) per share attributable to Mohawk Industries, Inc.$(11.94)(8.40)(9.10)(0.13)
Weighted-average common shares outstanding - diluted63,682 63,534 63,648 63,923 

Other Financial Information
Three Months EndedNine Months Ended
(Amounts in thousands)September 30, 2023October 1, 2022September 30, 2023October 1, 2022
Net cash provided by operating activities$512,034 224,774 1,032,907 427,435 
Less: Capital expenditures127,419 150,044 372,565 430,084 
Free cash flow$384,615 74,730 660,342 (2,649)
Depreciation and amortization$149,570 153,466 476,112 436,449 


MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Amounts in thousands)September 30, 2023October 1, 2022
ASSETS
Current assets:
    Cash and cash equivalents$518,452 326,971 
    Short-term investments— 110,000 
    Receivables, net1,943,147 2,003,261 
    Inventories2,519,709 2,900,116 
    Prepaid expenses and other current assets523,017 513,981 
        Total current assets5,504,325 5,854,329 
Property, plant and equipment, net4,788,825 4,524,536 
Right of use operating lease assets404,477 400,412 
Goodwill1,125,434 1,827,968 
Intangible assets, net854,427 823,100 
Deferred income taxes and other non-current assets461,007 370,689 
    Total assets$13,138,495 13,801,034 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt and current portion of long-term debt$922,697 1,542,139 
Accounts payable and accrued expenses2,159,499 2,256,097 
Current operating lease liabilities106,378 106,511 
        Total current liabilities3,188,574 3,904,747 
Long-term debt, less current portion1,675,590 1,019,984 
Non-current operating lease liabilities314,984 306,617 
Deferred income taxes and other long-term liabilities687,957 744,629 
        Total liabilities5,867,105 5,975,977 
Total stockholders' equity7,271,390 7,825,057 
    Total liabilities and stockholders' equity$13,138,495 13,801,034 


Segment Information
Three Months EndedAs of or for the Nine Months Ended
(Amounts in thousands)September 30, 2023October 1, 2022September 30, 2023October 1, 2022
Net sales:
    Global Ceramic$1,091,672 1,096,656 3,306,368 3,319,982 
    Flooring NA962,222 1,089,634 2,917,337 3,261,082 
    Flooring ROW712,292 731,249 2,299,132 2,505,326 
        Consolidated net sales$2,766,186 2,917,539 8,522,837 9,086,390 
Operating income (loss):
    Global Ceramic$(355,304)(559,706)(207,953)(305,099)
    Flooring NA(166,973)64,672 (131,787)260,026 
    Flooring ROW(159,569)45,508 2,590 304,265 
    Corporate and intersegment eliminations(51,896)(56,063)(117,756)(76,053)
        Consolidated operating income (loss)$(733,742)(505,589)(454,906)183,139 
Assets:
    Global Ceramic$4,905,861 4,866,822 
    Flooring NA3,911,708 4,490,502 
    Flooring ROW3,857,628 4,036,675 
    Corporate and intersegment eliminations463,298 407,035 
        Consolidated assets$13,138,495 13,801,034 



Reconciliation of Net Earnings (Loss) Attributable to Mohawk Industries, Inc. to Adjusted Net Earnings Attributable to Mohawk Industries, Inc. and Adjusted Diluted Earnings Per Share Attributable to Mohawk Industries, Inc.
 Three Months EndedNine Months Ended
(Amounts in thousands, except per share data)September 30, 2023October 1, 2022September 30, 2023October 1, 2022
Net earnings (loss) attributable to Mohawk Industries, Inc.$(760,459)(533,969)(579,004)(8,209)
Adjusting items:
Restructuring, acquisition and integration-related and other costs47,081 34,460 120,732 38,118 
Inventory step-up from purchase accounting(105)1,401 4,476 1,544 
Impairment of goodwill and indefinite-lived intangibles876,108 695,771 876,108 695,771 
Legal settlements, reserves and fees43,464 45,000 92,476 45,000 
Release of indemnification asset(1,890)— (2,850)7,324 
Income taxes - reversal of uncertain tax position1,890 — 2,850 (7,324)
Income taxes - impairment of goodwill and indefinite-lived intangibles(12,838)(10,168)(12,838)(10,168)
Income tax effect of adjusting items
(19,594)(20,487)(40,234)(23,291)
 Adjusted net earnings attributable to Mohawk Industries, Inc.$173,657 212,008 461,716 738,765 
Adjusted diluted earnings per share attributable to Mohawk Industries, Inc. $2.72 3.34 7.23 11.56 
Weighted-average common shares outstanding - diluted63,934 63,534 63,883 63,923 


Reconciliation of Total Debt to Net Debt
(Amounts in thousands)September 30, 2023
Short-term debt and current portion of long-term debt$922,697 
Long-term debt, less current portion1,675,590 
Total debt2,598,287 
Less: Cash and cash equivalents518,452 
  Net debt$2,079,835 



Reconciliation of Net Earnings to Adjusted EBITDA
Trailing Twelve
Three Months EndedMonths Ended
(Amounts in thousands)December 31,
2022		April 1,
2023		July 1,
2023		September 30,
2023		September 30,
2023
Net earnings (loss) including noncontrolling interests$33,552 80,276 101,214 (760,289)(545,247)
Interest expense14,601 17,137 22,857 20,144 74,739 
Income tax expense2,917 28,943 26,760 14,954 73,574 
Net (earnings) loss attributable to noncontrolling interests(96)(38)3 (170)(301)
Depreciation and amortization(1)
159,014 169,909 156,633 149,570 635,126 
  EBITDA209,988 296,227 307,467 (575,791)237,891 
Restructuring, acquisition and integration-related and other costs33,875 8,971 33,682 47,606 124,134 
Inventory step-up from purchase accounting1,218 3,305 1,276 (105)5,694 
Impairment of goodwill and indefinite-lived intangibles— — 876,108 876,108 
Legal settlements, reserves and fees, net of insurance proceeds9,231 990 48,022 43,464 101,707 
Release of indemnification asset(89)(857)(103)(1,890)(2,939)
Adjusted EBITDA$254,223 308,636 390,344 389,392 1,342,595 
Net debt to adjusted EBITDA1.5 
(1)Includes accelerated depreciation of $15,915 for Q4 2022, $23,019 for Q1 2023, $7,978 for Q2 2023 and ($525) for Q3 2023.

Reconciliation of Net Sales to Adjusted Net Sales
 Three Months EndedNine Months Ended
(Amounts in thousands)September 30, 2023October 1, 2022September 30, 2023October 1, 2022
Mohawk Consolidated
Net sales$2,766,186 2,917,539 8,522,837 9,086,390 
Adjustment for constant shipping days2,473 — 18,829 — 
Adjustment for constant exchange rates11,230 — 61,566 — 
Adjustment for acquisition volume(97,312)— (306,349)— 
Adjusted net sales$2,682,577 2,917,539 8,296,883 9,086,390 



Three Months Ended
 September 30, 2023October 1, 2022
Global Ceramic
Net sales$1,091,672 1,096,656 
Adjustment for constant shipping days2,472 — 
Adjustment for constant exchange rates19,362 — 
Adjustment for acquisition volume(82,571)— 
Adjusted net sales$1,030,935 1,096,656 
Flooring NA
Net sales$962,222 1,089,634 
Adjustment for acquisition volume(5,233)— 
Adjusted net sales$956,989 1,089,634 

Flooring ROW
Net sales$712,292 731,249 
Adjustment for constant exchange rates(8,132)— 
Adjustment for acquisition volume(9,509)— 
Adjusted net sales$694,651 731,249 

Reconciliation of Gross Profit to Adjusted Gross Profit
Three Months Ended
(Amounts in thousands)September 30, 2023October 1, 2022
Gross Profit$692,007 713,661 
Adjustments to gross profit:
Restructuring, acquisition and integration-related and other costs42,663 30,422 
Inventory step-up from purchase accounting(105)1,401 
Adjusted gross profit$734,565 745,484 
Adjusted gross profit as a percent of net sales26.6 %25.6 %


Reconciliation of Selling, General and Administrative Expenses to Adjusted Selling, General and Administrative Expenses
Three Months Ended
(Amounts in thousands)September 30, 2023October 1, 2022
Selling, general and administrative expenses$549,641 523,479 
Adjustments to selling, general and administrative expenses:
Restructuring, acquisition and integration-related and other costs(4,420)(4,117)
Legal settlements, reserves and fees(43,464)(45,000)
Adjusted selling, general and administrative expenses$501,757 474,362 
Adjusted selling, general and administrative expenses as a percent of net sales18.1 %16.3 %



Reconciliation of Operating Income (loss) to Adjusted Operating Income
Three Months Ended
(Amounts in thousands)September 30, 2023October 1, 2022
Mohawk Consolidated
Operating earnings (loss)$(733,742)(505,589)
Adjustments to operating earnings (loss):
Restructuring, acquisition and integration-related and other costs47,083 34,539 
Inventory step-up from purchase accounting(105)1,401 
Impairment of goodwill and indefinite-lived intangibles876,108 695,771 
Legal settlements, reserves and fees43,464 45,000 
Adjusted operating income$232,808 271,122 

Adjusted operating income as a percent of net sales8.4 %9.3 %

Global Ceramic
Operating earnings (loss)$(355,304)(559,706)
Adjustments to segment operating income (loss):
Restructuring, acquisition and integration-related and other costs17,762 3,366 
Impairment of goodwill and indefinite-lived intangibles425,232 688,514 
Inventory step-up from purchase accounting(105)— 
Adjusted segment operating income$87,585 132,174 
Adjusted segment operating income as a percent of net sales8.0 %12.1 %

Flooring NA
Operating income (loss)$(166,973)64,672 
Adjustments to segment operating income (loss):
Restructuring, acquisition and integration-related and other costs27,323 20,223 
Legal settlements and reserves1,500 — 
Acquisitions purchase accounting, including inventory step-up— 1,401 
Impairment of goodwill and indefinite-lived intangibles215,809 1,407 
Adjusted segment operating income$77,659 87,703 
Adjusted segment operating income as a percent of net sales8.1 %8.0 %




Flooring ROW
Operating income (loss)$(159,569)45,508 
Adjustments to segment operating income (loss):
Restructuring, acquisition and integration-related and other costs1,836 10,950 
Impairment of goodwill and indefinite-lived intangibles235,067 5,850 
Adjusted segment operating income$77,334 62,308 
Adjusted segment operating income as a percent of net sales10.9 %8.5 %

Corporate and intersegment eliminations  
Operating (loss)$(51,896)(56,063)
Adjustments to segment operating (loss):
Restructuring, acquisition and integration-related and other costs162 — 
Legal settlement, reserves and fees41,964 45,000 
  Adjusted segment operating (loss)$(9,770)(11,063)

Reconciliation of Earnings (Loss) Including Noncontrolling Interests Before Income Taxes to Adjusted Earnings Including Noncontrolling Interests Before Income Taxes
Three Months Ended
(Amounts in thousands)September 30, 2023October 1, 2022
 Earnings (loss) before income taxes$(745,335)(518,144)
Net earnings (loss) attributable to noncontrolling interests(170)(256)
Adjustments to earnings (loss) including noncontrolling interests before income taxes:
Restructuring, acquisition and integration-related and other costs47,081 34,460 
Inventory step-up from purchase accounting(105)1,401 
Impairment of goodwill and indefinite-lived intangibles876,108 695,771 
Legal settlements, reserves and fees43,464 45,000 
Release of indemnification asset(1,890)— 
Adjusted earnings including noncontrolling interests before income taxes$219,153 258,232 

Reconciliation of Income Tax Expense to Adjusted Income Tax Expense
Three Months Ended
(Amounts in thousands)September 30, 2023October 1, 2022
Income tax expense$14,954 15,569 
Income taxes - reversal of uncertain tax position(1,890)— 
Income tax effect on impairment of goodwill and indefinite-lived intangibles12,838 10,168 
Income tax effect of adjusting items19,594 20,487 
Adjusted income tax expense$45,496 46,224 
Adjusted income tax rate20.8%17.9%


The Company supplements its condensed consolidated financial statements, which are prepared and presented in accordance with US GAAP, with certain non-GAAP financial measures. As required by the Securities and Exchange Commission rules, the tables above present a reconciliation of the Company’s non-GAAP financial measures to the most directly comparable US GAAP measure. Each of the non-GAAP measures set forth above should be considered in addition to the comparable US GAAP measure, and may not be comparable to similarly


titled measures reported by other companies. The Company believes these non-GAAP measures, when reconciled to the corresponding US GAAP measure, help its investors as follows: Non-GAAP revenue measures that assist in identifying growth trends and in comparisons of revenue with prior and future periods and non-GAAP profitability measures that assist in understanding the long-term profitability trends of the Company's business and in comparisons of its profits with prior and future periods.
The Company excludes certain items from its non-GAAP revenue measures because these items can vary dramatically between periods and can obscure underlying business trends. Items excluded from the Company’s non-GAAP revenue measures include: foreign currency transactions and translation; more or fewer shipping days in a period and the impact of acquisitions.
The Company excludes certain items from its non-GAAP profitability measures because these items may not be indicative of, or are unrelated to, the Company's core operating performance. Items excluded from the Company's non-GAAP profitability measures include: restructuring, acquisition and integration-related and other costs, legal settlements, reserves and fees, net of insurance proceeds, impairment of goodwill and indefinite-lived intangibles, acquisition purchase accounting, including inventory step-up from purchase accounting, release of indemnification assets and the reversal of uncertain tax positions.

v3.23.3
Cover
Oct. 26, 2023
Cover [Abstract]  
Document Type 8-K
Document Period End Date Oct. 26, 2023
Entity Registrant Name MOHAWK INDUSTRIES, INC.
Entity Incorporation, State or Country Code DE
Entity File Number 01-13697
Entity Tax Identification Number 52-1604305
Entity Address, Address Line One 160 S. Industrial Blvd.
Entity Address, City or Town Calhoun
Entity Address, State or Province GA
Entity Address, Postal Zip Code 30701
City Area Code 706
Local Phone Number 629-7721
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Title of 12(b) Security Common Stock, $.01 par value
Trading Symbol MHK
Security Exchange Name NYSE
Amendment Flag false
Entity Central Index Key 0000851968
Mohawk Industries (NYSE:MHK)
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