Mohawk Industries Inc 10-Q for FY2024 Q1

Mohawk Industries Inc (MHK)

10-Q 2024-04-26 For: 2024-03-30

Added on April 09, 2026

About this 10-Q

Mohawk Industries Inc filed this 10-Q on April 26, 2024, covering the quarter ended March 30, 2024 (FY2024 Q1).

Headline figures

Quarter ended March 30, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $2.68B; down 4.5% from $2.81B a year earlier
Net income: $105M; up 30.9% from net income of $80.2M a year earlier
Diluted EPS: $1.64; up 30.2% from $1.26 a year earlier

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Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Stock, $.01 par value	MHK	New York Stock Exchange


		Page No
Part I.	FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)

	Condensed Consolidated Statements of Operations for the three months ended March 30, 202 4 and April 1, 202 3	3

	Condensed Consolidated Statements of Comprehensive Income (Loss) for the three months ended March 30, 202 4 and April 1, 202 3	4

	Condensed Consolidated Balance Sheets as of March 30, 202 4 and December 31, 202 3	5

	Condensed Consolidated Statements of Cash Flows for the three months ended March 30, 202 4 and April 1, 202 3	6

	Notes to the Condensed Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27

Item 4.	Controls and Procedures	28

Part II.	OTHER INFORMATION

Item 1.	Legal Proceedings	29

Item 1A.	Risk Factors	29

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29

Item 3.	Defaults Upon Senior Securities	30

Item 4.	Mine Safety Disclosures	30

Item 5.	Other Information	31

Item 6.	Exhibits	32


	Three Months Ended
(In millions, except per share data)	March 30, 2024		April 1, 2023


Net sales	$	2,679.4	2,806.2
Cost of sales	2,029.9		2,162.8
Gross profit	649.5		643.4
Selling, general and administrative expenses	502.9		517.7

Operating income	146.6		125.7
Interest expense	14.9		17.1
Other (income) and expense, net	(1.1)		(0.6)
Earnings before income taxes	132.8		109.2
Income tax expense	27.8		28.9


Net earnings including noncontrolling interests	105.0		80.3
Less: net earnings attributable to noncontrolling interests	—		0.1
Net earnings attributable to Mohawk Industries, Inc.	$	105.0	80.2



Basic earnings per share attributable to Mohawk Industries, Inc.	$	1.65	1.26
Weighted-average common shares outstanding—basic	63.7		63.6



Diluted earnings per share attributable to Mohawk Industries, Inc.	$	1.64	1.26
Weighted-average common shares outstanding—diluted	64.0		63.8


	Three Months Ended
(In millions)	March 30, 2024		April 1, 2023


Net earnings including noncontrolling interests	$	105.0	80.3
Other comprehensive income (loss):
Foreign currency translation adjustments	(87.9)		6.9
Prior pension and post-retirement benefit service cost and actuarial loss, net of tax	—		(0.5)
Other comprehensive income (loss)	(87.9)		6.4
Comprehensive income	17.1		86.7
Less: comprehensive loss attributable to noncontrolling interests	—		—
Comprehensive income attributable to Mohawk Industries, Inc.	$	17.1	86.7


(In millions, except par value and preferred stock shares)	March 30, 2024		December 31, 2023


ASSETS
Current assets:
Cash and cash equivalents	$	658.5	642.6

Receivables, net	2,007.2		1,874.7
Inventories	2,527.7		2,551.9
Prepaid expenses	512.5		515.8

Other current assets	15.8		19.3
Total current assets	5,721.7		5,604.3
Property, plant and equipment	10,355.1		10,392.3
Less: accumulated depreciation	5,470.0		5,399.1
Property, plant and equipment, net	4,885.1		4,993.2
Right of use operating lease assets	413.6		428.5
Goodwill	1,140.2		1,159.7
Tradenames	694.2		705.7
Other intangible assets subject to amortization, net	159.6		169.6
Deferred income taxes and other non-current assets	517.1		498.8
Total assets	$	13,531.5	13,559.8


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term debt and current portion of long-term debt	$	931.5	1,001.7
Accounts payable and accrued expenses	2,079.3		2,035.3
Current operating lease liabilities	109.3		108.9
Total current liabilities	3,120.1		3,145.9
Deferred income taxes	385.8		391.5
Long-term debt, less current portion	1,694.5		1,701.8
Non-current operating lease liabilities	321.8		337.5
Other long-term liabilities	361.5		354.0
Total liabilities	$	5,883.7	5,930.7
Commitments and contingencies (Note 16)

Stockholders’ equity:
Preferred stock, $.01 par value; 60,000 shares authorized; no shares issued	$	—	—
Common stock, $.01 par value; 150.0 shares authorized; 71.2 and 71.0 shares issued and outstanding in 2024 and 2023, respectively	0.7		0.7
Additional paid-in capital	1,949.1		1,947.5
Retained earnings	7,075.2		6,970.2
Accumulated other comprehensive income (loss)	(1,167.8)		(1,080.0)
	7,857.2		7,838.4
Less: treasury stock at cost; 7.3 shares in 2024 and 2023	215.3		215.4
Total Mohawk Industries, Inc. stockholders’ equity	7,641.9		7,623.0
Noncontrolling interests	5.9		6.1
Total stockholders’ equity	7,647.8		7,629.1
Total liabilities and stockholders’ equity	$	13,531.5	13,559.8


(In millions)	Amounts Recognized as of the Acquisition Date
Working capital	$	95.3
Property, plant and equipment	333.5
Tradenames	38.5
Customer relationships	4.0
Goodwill	87.5
Long-term debt, including current portion	(26.0)
Deferred tax, net	(10.0)
	522.8
Less: cash acquired	(7.3)
Net consideration transferred (net of cash acquired)	$	515.5


(In millions)
March 30, 2024	Global Ceramic		Flooring NA	Flooring ROW	Total
Geographical Markets:
United States	$	560.4	869.7	1.6	1,431.7
Europe (1)	255.5		0.6	565.6	821.7
Latin America	185.1		1.0	9.9	196.0
Other	43.8		28.9	157.3	230.0
Total	$	1,044.8	900.2	734.4	2,679.4

Product Categories:
Ceramic & Stone	$	1,032.2	5.9	—	1,038.1
Carpet & Resilient	12.6		700.0	214.2	926.8
Laminate & Wood	—		194.3	232.3	426.6
Other (2)	—		—	287.9	287.9
Total	$	1,044.8	900.2	734.4	2,679.4


(In millions)	Asset Write- Downs and (Gains) on Disposals		Severance	Other Restructuring Costs	Total
Balance as of December 31, 2023	$	—	12.1		—	12.1
Restructuring costs
Global Ceramic	2.0		0.5		0.6	3.1
Flooring NA	—		0.1		0.8	0.9
Flooring ROW	2.3		—		0.4	2.7
Corporate	—		—		—	—
Total restructuring costs	4.3		0.6		1.8	6.7
Cash payments	—		(3.0)		(1.7)	(4.7)
Non-cash items	(4.3)		(0.2)		(0.1)	(4.6)
Balances as of March 30, 2024	$	—	9.5		—	9.5

Restructuring costs recorded in:
Cost of sales	$	4.3	0.1		1.0	5.4
Selling, general and administrative expenses	—		0.5		0.8	1.3
Total restructuring costs	$	4.3	0.6		1.8	6.7


(In millions)	Customer Relationships		Patents	Other	Total




Balance as of December 31, 2023
Gross carrying amount	$	691.5	249.7	8.7	949.9
Accumulated amortization	(531.0)		(247.2)	(2.1)	(780.3)
Net intangible assets subject to amortization	160.5		2.5	6.6	169.6
Balance as of March 30, 2024
Gross carrying amount	680.1		244.0	8.7	932.8
Accumulated amortization	(529.3)		(241.7)	(2.2)	(773.2)
Net intangible assets subject to amortization	$	150.8	2.3	6.5	159.6


(In millions)	Foreign Currency Translation Adjustments		Prior Pension and Post-Retirement Benefit Service Cost and Actuarial Gain (Loss)	Total
Balance as of December 31, 2023	$	(1,079.3)	(0.7)	(1,080.0)
Current period other comprehensive income (loss)	(87.8)		—	(87.8)

Balance as of March 30, 2024	$	(1,167.1)	(0.7)	(1,167.8)


		Total Stockholders’ Equity
		Common Stock		Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Treasury Stock		Noncontrolling Interests	Total Stockholders’ Equity
(In millions)	Shares	Amount	Shares				Amount















Balance as of December 31, 2023		71.0	$0.7	$1,947.5	$6,970.2	($1,080.0)	(7.3)	($215.4)	$6.1	$7,629.1
Shares issued under employee and director stock plans, net of shares withheld to pay taxes on employees’ equity awards		0.2	—	(5.2)	—	—	—	0.1	—	(5.1)
Stock-based compensation expense		—	—	6.8	—	—	—	—	—	6.8




Net earnings attributable to noncontrolling interests		—	—	—	—	—	—	—	—	—
Currency translation adjustment on noncontrolling interests		—	—	—	—	—	—	—	(0.1)	(0.1)
Purchase of noncontrolling interest, net of taxes		—	—	—	—	—	—	—	(0.1)	(0.1)

Currency translation adjustment		—	—	—	—	(87.8)	—	—	—	(87.8)
Prior pension and post-retirement benefit service cost and actuarial loss		—	—	—	—	—	—	—	—	—

Net earnings		—	—	—	105.0	—	—	—	—	105.0
Balances as of March 30, 2024		71.2	$0.7	$1,949.1	$7,075.2	($1,167.8)	(7.3)	($215.3)	$5.9	$7,647.8








ROU assets obtained in exchange for lease obligations:
Operating leases	$	14.4	38.0
Finance leases	$	7.9	6.3


(In millions)	March 30, 2024		December 31, 2023
Finished goods	$	1,795.5	1,797.0
Work in process	165.2		164.2
Raw materials	567.0		590.7
Total inventories	$	2,527.7	2,551.9


(In millions)	March 30, 2024		December 31, 2023
Outstanding checks in excess of cash	$	0.5	2.2
Accounts payable, trade	1,101.9		1,038.0
Accrued expenses	681.8		667.7
Product warranties	34.0		37.6
Accrued interest	16.8		20.1


Accrued compensation and benefits	244.3		269.7
Total accounts payable and accrued expenses	$	2,079.3	2,035.3


	March 30, 2024			December 31, 2023
(In millions)	Fair Value		Carrying Value	Fair Value	Carrying Value
1.750% Senior Notes, payable June 12, 2027; interest payable annually	$	511.7	539.5	521.9	551.9
3.625% Senior Notes, payable May 15, 2030; interest payable semi-annually	461.7		500.0	464.0	500.0
5.85% Senior Notes, payable September 18, 2028; interest payable semi-annually	618.0		600.0	622.9	600.0




U.S. commercial paper	532.0		532.0	—	—
European commercial paper	380.9		380.9	—	—
Senior credit facility, payable August 12, 2027	—		—	67.1	67.1
U.S. Term Loan Facility	—		—	675.0	675.0
European Term Loan Facility	—		—	242.8	242.8
Finance leases and other	83.8		83.8	77.7	77.7
Unamortized debt issuance costs	(10.2)		(10.2)	(11.0)	(11.0)
Total debt	2,577.9		2,626.0	2,660.4	2,703.5
Less: current portion of long term-debt and commercial paper	931.5		931.5	1,001.7	1,001.7
Long-term debt, less current portion	$	1,646.4	1,694.5	1,658.7	1,701.8


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 3, 2024	0.0	$	—	0.0	$	229.2
February 4 through March 2, 2024	0.0	$	—	0.0	$	229.2
March 3 through March 30, 2024	0.0	$	—	0.0	$	229.2
Total	0.0	$	—	0.0


No.						Description

3.1						Restated Certificate of Incorporation of Mohawk, as amended. (Incorporated herein by reference to Exhibit 3.1 in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1998.)
3.2						Restated Bylaws of Mohawk. (Incorporated herein by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed on February 19, 2019.)
31.1						Certification Pursuant to Rule 13a-14(a).
31.2						Certification Pursuant to Rule 13a-14(a).
32.1						Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2						Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
95.1						Mine Safety Disclosure pursuant to Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act
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.
104						Cover Page Interactive Data File (embedded within the Inline XBRL document and contained in Exhibit 101)


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			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.