MOHAWK INDUSTRIES INC
For the period ended Sep 28, 2024. Filed Oct 25, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 28, 2024 · Filed Oct 25, 2024
MHK$150.52-0.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-29; filed 2024-07-26.
0000851968-24-000106
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-28; filed 2024-10-25.
0000851968-24-000125
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 73 previous paragraphs and 79 current paragraphs.
30 unchanged; 35 reworded; 13 added; 8 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 0 previous and 0 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (13)
Current report
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the notes thereto, which are included in this report, as well as our audited consolidated financial statements for the year ended December 31, 2023, which are included in our Annual Report on Form 10-K for the year ended December 31, 2023.
Current report
References to “Mohawk,” “the Company,” “we,” “our” and “us” refer to Mohawk Industries, Inc. and its consolidated subsidiaries as a whole, unless the context otherwise requires.
Current report
Impairment of goodwill and indefinite-lived intangibles
Current report
Impairment of goodwill and indefinite-lived intangibles for the three months ended September 28, 2024 was zero compared to impairment of goodwill and indefinite-lived intangibles of $876.1 million for the three months ended September 30, 2023. During the third quarter of 2023, due to the impact of a higher WACC, macroeconomic conditions, and the reduction in the Company's market capitalization, the Company performed interim impairment tests of its goodwill and indefinite-lived intangible assets, which resulted in impairment charges of $876.1 million. If, in the future, the Company's market capitalization and/or the estimated fair value of the Company's reporting units were to decline further, it may be necessary to record additional impairment charges.
Current report
Operating income (loss)
Current report
Operating income for the three months ended September 28, 2024 was $212.3 million compared to operating loss of $733.7 million for the three months ended September 30, 2023. The change was primarily attributable to lower impairment charges to reduce the carrying amount of goodwill and indefinite-lived intangibles of approximately $876 million; productivity gains of approximately $44 million; lower legal settlements, reserves and fees of approximately $43 million; lower restructuring, acquisition and integration-related, and other costs of approximately $20 million and lower input costs of approximately $15 million, partially offset by the unfavorable net impact of price and product mix of approximately $70 million.
Current report
Flooring NA—Operating income was $73.0 million for the three months ended September 28, 2024 compared to operating loss of $167.0 million for the three months ended September 30, 2023. The change was primarily attributable to lower impairment charges to reduce the carrying amount of goodwill and indefinite-lived intangibles of approximately $216 million; productivity gains of approximately $14 million; lower input costs of approximately $12 million; lower restructuring, acquisition and integration-related, and other costs of approximately $11 million and higher sales volume of approximately $11 million, partially offset by the unfavorable net impact of price and product mix of approximately $28 million.
Current report
Other income and expense, net
Current report
Flooring ROW—Net sales for the nine months ended September 28, 2024 were $2,148.6 million compared to net sales of $2,299.1 million for the nine months ended September 30, 2023. The change was primarily attributable to the unfavorable net impact of price and product mix of approximately $189 million, partially offset by higher sales volume of approximately $41 million.
Current report
Impairment of goodwill and indefinite-lived intangibles
Current report
Impairment of goodwill and indefinite-lived intangibles for the nine months ended September 28, 2024 was zero compared to impairment of goodwill and indefinite-lived intangibles of $876.1 million for the nine months ended September 30, 2023. During the nine months ended September 30, 2023, due to the impact of a higher WACC, macroeconomic conditions, and the reduction in the Company's market capitalization, the Company performed interim impairment tests of its goodwill and indefinite-lived intangible assets, which resulted in impairment charges of $876.1 million. If, in the future, the Company's market capitalization and/ or the estimated fair value of the Company's reporting units were to decline further, it may be necessary to record additional impairment charges.
Current report
Operating income (loss)
Current report
Other income and expense, net
Removed paragraphs (8)
Previous report
During the past three decades, the Company has grown significantly through a combination of organic growth and acquisitions. Its current geographic breadth and diverse product offering are reflected in three reporting segments: Global Ceramic, Flooring NA and Flooring ROW. Global Ceramic designs, manufactures, sources and markets a broad line of ceramic tile, porcelain tile, natural stone tile and other products including natural stone, porcelain slabs and quartz countertops, which it distributes primarily in North America, Europe and Latin America through various selling channels, which include home centers, Company-owned service centers and stores, floor covering retailers, ceramic tile specialists, e-commerce retailers, residential builders, independent distributors, commercial contractors and commercial end users. Flooring NA designs, manufactures, sources and markets its floor covering products, including broadloom carpet, carpet tile, carpet cushion, rugs, laminate, vinyl products, including LVT and sheet vinyl, and wood flooring, all of which it distributes through its network of regional distribution centers and satellite warehouses using Company-operated trucks, common carriers or rail transportation. The Segment’s product lines are sold through various channels, including independent floor covering retailers, home centers, mass merchandisers, department stores, shop at home, buying groups, residential builders, independent distributors, commercial contractors and commercial end users. Flooring ROW designs, manufactures, sources, licenses and markets laminate, vinyl products, including LVT and sheet vinyl, wood flooring, broadloom carpet, carpet tiles, roofing panels, insulation boards, MDF and chipboards, and decorative panels, which it distributes primarily in Europe and Australasia through various channels, including independent floor covering retailers, wholesalers, home centers, Company-operated distributors, independent distributors, residential builders, commercial contractors and commercial end users.
Previous report
Net sales for the three months ended June 29, 2024 were $2,801.3 million compared to net sales of $2,950.5 million for the three months ended July 1, 2023. The change was primarily attributable to the unfavorable net impact of price and product mix of approximately $128 million and the unfavorable net impact of foreign exchange rates of approximately $25 million.
Previous report
Operating income
Previous report
Flooring NA—Operating income was $78.3 million for the three months ended June 29, 2024 compared to operating income of $37.2 million for the three months ended July 1, 2023. The change was primarily attributable to lower input costs of approximately $36 million, productivity gains of approximately $19 million and lower restructuring, acquisition and integration-related, and other costs of approximately $15 million, partially offset by the unfavorable net impact of price and product mix of approximately $36 million.
Previous report
Other Income and Expense
Previous report
Operating income
Previous report
Operating income for the six months ended June 29, 2024 was $360.6 million compared to operating income of $278.8 million for the six months ended July 1, 2023. The change was primarily attributable to lower input costs of approximately $219 million; productivity gains of approximately $96 million, lower legal settlements, reserves and fees of approximately $39 million and lower restructuring, acquisition and integration-related, and other costs of approximately $29 million, partially offset by the unfavorable net impact of price and product mix of approximately $264 million and the unfavorable net impact of foreign exchange rates of approximately $23 million.
Previous report
Other Income and Expense
Reworded paragraphs (35)
Previous wording
Elevated interest rates, delayed consumer discretionary spending due to inflationary pressures, and other macroeconomic factors continue to impact new home construction and residential renovation and remodeling activity. Residential remodeling is the primary sales driver of flooring products, and most flooring is replaced before a home is listed for sale or just after a home purchase is completed. The current housing market conditions have suppressed remodeling activity as home sales remain soft. Housing turnover rates remain suppressed due to elevated home mortgage rates and the "locked-in" effect on homeowners, and consumers continue to face a higher cost of living and postpone large purchases of durable goods such as flooring. The Company has, to some extent, offset the impact of a soft housing market and decreased renovation activity through cost containment, productivity and lower input costs. Due to low housing availability, aging stock and greater household formation, the Company believes demand in its markets will accelerate when interest rates decline. In addition, declining costs in energy and raw materials, coupled with lower industry volumes, have continued to exert pressure on selling prices, although energy prices in certain geographies and materials prices in some product categories remain volatile and may change significantly and unpredictably. During 2022 and 2023, the Company implemented a number of restructuring actions, productivity initiatives and manufacturing enhancements focused on reducing costs to enhance future performance, including certain facility, asset and product rationalizations and workforce reductions. The Company anticipates these projects will deliver annual savings of approximately $150 million, with an estimated cost of approximately $215 million. In 2024, the Company announced further restructuring actions to take advantage of additional opportunities related to the activities described above. The Company anticipates these projects will deliver further annual savings of approximately $100 million, of which approximately $20-$25 million will be recognized during 2024. The cash cost of these actions is approximately $40 million, with a total cost of approximately $130 million. Execution timelines will vary by project, with some savings extending into 2026.
Current wording
Residential remodeling is the primary sales driver of flooring products and most flooring is replaced before a home is listed for sale or just after a home purchase is completed. Currently, consumers are delaying their discretionary spending habits due to inflationary pressures and other macroeconomic factors, and this trend continues to impact new home construction and residential renovation and remodeling activity. While the U.S. federal funds rate decreased in September 2024 for the first time since March 2020, housing turnover rates remain suppressed due to elevated home mortgage rates and the "locked-in" effect on homeowners, and consumers continue to face a higher cost of living and postpone large purchases of durable goods such as flooring. The Company has, to some extent, offset the impact of a soft housing market and decreased renovation activity through cost containment, productivity and lower input costs. Due to low housing availability, aging stock and greater household formation, the Company believes demand in its markets will accelerate when interest rates decline. In addition, declining costs in energy and raw materials, coupled with lower industry volumes, have continued to exert pressure on selling prices, although energy prices in certain geographies and materials prices in some product categories remain volatile and may change significantly and unpredictably.
Previous wording
Due to its global footprint, Mohawk’s business is sensitive to macroeconomic and geopolitical events in the United States and abroad. As a result of ongoing Russian military actions in Ukraine, the Company has experienced and may continue to experience supply chain disruption of raw materials sourced from Ukraine, as well as other materials and spare parts needed in the Company’s operations if alternative sources identified in other countries cannot fulfill these needs. The Company may also continue to be impacted by global increases in the cost of natural gas, oil and oil-based raw materials and chemicals. In addition, the United States, the European Union and other governments have imposed and extended sanctions on Russia as well as on certain individuals and financial institutions and have proposed the use of broader economic sanctions. Since the first quarter of 2022, the Company has suspended new investments in Russia. The broader consequences of this conflict, which may include further economic sanctions, embargoes, regional instability, and geopolitical shifts; potential retaliatory actions, including nationalization of foreign-owned businesses; increased tensions between the United States and countries in which the Company operates; and the extent of the conflict’s effect on the Company’s business and results of operations, as well as the global economy, cannot be predicted. In addition, a prolonged and more expansive conflict in the Middle East region could escalate oil and petroleum-based chemical prices as well as lead to the introduction of sanctions or transportation barriers, though the extent of the conflict’s impact on the Company’s business and results of operations, as well as the global economy, cannot be predicted.
Current wording
Due to its global footprint, Mohawk’s business is sensitive to geopolitical conflict, including the Russia-Ukraine conflict and conflicts in the Middle East. Since the first quarter of 2022, the Company has suspended new investments in Russia in response to ongoing Russian military actions in Ukraine, and the United States, the European Union and other governments have imposed and extended sanctions on Russia as well as on certain individuals and financial institutions, and have proposed the use of broader economic sanctions. Increased restrictions on global trade could result in, among other things, increased volatility in foreign exchange rates and financial markets, supply chain disruptions, and decreased consumer discretionary spending, any of which may adversely affect the Company’s business and supply chain. While the Company has had success sourcing alternate suppliers of raw materials to counteract supply chain disruptions, the Company may be negatively impacted by additional supply chain disruption in the future caused by further escalation of geopolitical conflict. In addition, the Company may be impacted by global increases in the cost of natural gas, oil and oil-based raw materials and chemicals. The broader consequences of current ongoing military conflicts, which may include further economic sanctions, embargoes, regional instability, and geopolitical shifts; potential retaliatory actions, including nationalization of foreign-owned businesses; increased tensions between the United States and countries in which the Company operates; and the extent of the conflict’s effect on the Company’s business and results of operations, as well as the global economy, cannot be predicted. In addition, a prolonged and more expansive conflict in the Middle East region could escalate oil and petroleum-based chemical prices as well as lead to the introduction of sanctions or transportation barriers, though the extent of the impact on the Company’s business and results of operations, as well as the global economy, cannot be predicted.
Previous wording
The Company believes that a number of circumstances may influence trends in 2024, including high interest rates, the impact of inflation and material availability due to disruptions in the global supply chain, but the extent and duration of such impact cannot be predicted.
Current wording
The Company believes that a number of circumstances may influence trends in 2024, including interest rates, escalation of geopolitical conflict and decreased availability of material due to disruptions in the global supply chain, but the extent and duration of such impacts cannot be predicted.
Previous wording
In 2024, the Company plans to invest approximately $480 million focused on completing capacity expansion projects and targeted initiatives that will drive cost reduction while improving operational performance.
Current wording
In 2024, the Company plans to invest approximately $450 million focused on completing capacity expansion projects and targeted initiatives that will drive cost reduction while improving operational performance.
Previous wording
For the six months ended June 29, 2024, the net earnings attributable to the Company were $262.4 million compared to the net earnings attributable to the Company of $181.4 million for the six months ended July 1, 2023. The change was primarily attributable to lower inflation; productivity gains; lower legal settlements, reserves and fees and lower restructuring, acquisition and integration-related, and other costs, partially offset by the unfavorable net impact of price and product mix and the unfavorable net impact of foreign exchange rates.
Current wording
For the three months ended September 28, 2024, the net earnings attributable to the Company were $162.0 million compared to the net loss attributable to the Company of $760.4 million for the three months ended September 30, 2023. The change was primarily attributable to lower impairment charges to reduce the carrying amount of goodwill and indefinite-lived intangibles; productivity gains; lower legal settlements, reserves and fees; lower restructuring, acquisition and integration-related, and other costs and lower input costs, partially offset by the unfavorable net impact of price and product mix.
Previous wording
For the three months ended June 29, 2024, the net earnings attributable to the Company were $157.4 million compared to the net earnings attributable to the Company of $101.2 million for the three months ended July 1, 2023. The change was primarily attributable to lower inflation; productivity gains and lower legal settlements, reserves and fees, partially offset by the unfavorable net impact of price and product mix; higher taxes due to increased earnings for the three months ended June 29, 2024 and the unfavorable net impact of foreign exchange rates.
Current wording
For the nine months ended September 28, 2024, the net earnings attributable to the Company were $424.5 million compared to the net loss attributable to the Company of $579.0 million for the nine months ended September 30, 2023. The change was primarily attributable to lower impairment charges to reduce the carrying amount of goodwill and indefinite-lived intangibles; lower input costs; productivity gains; lower legal settlements, reserves and fees and lower restructuring, acquisition and integration-related, and other costs, partially offset by the unfavorable net impact of price and product mix.
Previous wording
For the six months ended June 29, 2024, the Company generated $417.3 million of cash from operating activities. As of June 29, 2024, the Company had cash and cash equivalents of $497.4 million, of which $283.5 million was in the United States and $213.9 million was in foreign countries.
Current wording
For the nine months ended September 28, 2024, the Company generated $736.9 million of cash from operating activities. As of September 28, 2024, the Company had cash and cash equivalents of $424.0 million, of which $245.6 million was in the United States and $178.4 million was in foreign countries.
Previous wording
Flooring ROW—Net sales for the three months ended June 29, 2024 were $727.2 million compared to net sales of $793.4 million for the three months ended July 1, 2023. The change was primarily attributable to the unfavorable net impact of price and product mix of approximately $56 million and the unfavorable net impact of foreign exchange rates of approximately $10 million.
Current wording
Net sales for the three months ended September 28, 2024 were $2,719.0 million compared to net sales of $2,766.1 million for the three months ended September 30, 2023. The change was primarily attributable to the unfavorable net impact of price and product mix of approximately $56 million, partially offset by more shipping days for the quarter ended September 28, 2024 of approximately $14 million.
Previous wording
Global Ceramic—Net sales for the three months ended June 29, 2024 were $1,115.6 million compared to net sales of $1,155.4 million for the three months ended July 1, 2023. The change was primarily attributable to the unfavorable net impact of price and product mix of approximately $23 million and the unfavorable net impact of foreign exchange rates of approximately $15 million.
Current wording
Global Ceramic—Net sales for the three months ended September 28, 2024 were $1,058.0 million compared to net sales of $1,091.7 million for the three months ended September 30, 2023. The change was primarily attributable to lower sales volume of approximately $18 million and the unfavorable net impact of foreign exchange rates of approximately $13 million.
Previous wording
Flooring NA—Net sales for the six months ended June 29, 2024 were $1,858.7 million compared to net sales of $1,955.1 million for the six months ended July 1, 2023. The change was primarily attributable to the unfavorable net impact of price and product mix of approximately $72 million and lower legacy sales volume of approximately $25 million.
Current wording
Flooring NA—Net sales for the three months ended September 28, 2024 were $974.0 million compared to net sales of $962.2 million for the three months ended September 30, 2023. The change was primarily attributable to higher sales volume of approximately $39 million, partially offset by the unfavorable net impact of price and product mix of approximately $27 million.
Previous wording
Flooring ROW—Net sales for the six months ended June 29, 2024 were $1,461.6 million compared to net sales of $1,586.9 million for the six months ended July 1, 2023. The change was primarily attributable to the unfavorable net impact of price and product mix of approximately $163 million and the unfavorable net impact of foreign exchange rates of approximately $11 million, partially offset by higher legacy sales volume of approximately $60 million.
Current wording
Flooring ROW—Net sales for the three months ended September 28, 2024 were $687.0 million compared to net sales of $712.2 million for the three months ended September 30, 2023. The change was primarily attributable to the unfavorable net impact of price and product mix of approximately $26 million and lower sales volume of approximately $19 million, partially offset by more shipping days for the quarter ended September 28, 2024 of approximately $11 million and the favorable net impact of foreign exchange rates of approximately $9 million.
Previous wording
Gross profit for the six months ended June 29, 2024 was $1,373.3 million compared to gross profit of $1,375.4 million for the six months ended July 1, 2023. The change was primarily attributable to the unfavorable net impact of price and product mix and the unfavorable net impact of foreign exchange rates, partially offset by lower input costs and productivity gains. Gross profit did not significantly change as a percentage of net sales for the six months ended June 29, 2024 compared to the six months ended July 1, 2023.
Current wording
Gross profit for the three months ended September 28, 2024 was $692.6 million compared to gross profit of $692.0 million for the three months ended September 30, 2023. The change was primarily attributable to productivity gains of approximately $33 million; lower input costs of approximately $25 million and lower restructuring, acquisition and integration-related, and other costs of approximately $24 million, partially offset by the unfavorable net impact of price and product mix of approximately $69 million. Gross profit did not significantly change as a percentage of net sales for the three months ended September 28, 2024 compared to the three month ended September 30, 2023.
Previous wording
Selling, general and administrative expenses for the three months ended June 29, 2024 were $509.8 million compared to $578.9 million for the three months ended July 1, 2023. The change was primarily attributable to lower legal settlements, reserves and fees. Selling, general and administrative expenses did not significantly change as a percentage of net sales for the three months ended June 29, 2024 compared to the three months ended July 1, 2023.
Current wording
Selling, general and administrative expenses for the three months ended September 28, 2024 were $480.3 million compared to $549.6 million for the three months ended September 30, 2023. The change was primarily attributable to lower legal settlements, reserves and fees of $43 million.
Previous wording
Global Ceramic—Operating income was $83.1 million for the three months ended June 29, 2024 compared to operating income of $84.0 million for the three months ended July 1, 2023. The change was primarily attributable to the unfavorable net impact of price and product mix of approximately $25 million and the unfavorable net impact of foreign exchange rates of approximately $10 million, partially offset by lower input costs of approximately $17 million and productivity gains of approximately $14 million.
Current wording
Global Ceramic—Operating income was $83.4 million for the three months ended September 28, 2024 compared to operating loss of $355.2 million for the three months ended September 30, 2023. The change was primarily attributable to lower impairment charges to reduce the carrying amount of goodwill and indefinite-lived intangibles of approximately $425 million; productivity gains of approximately $22 million and lower restructuring, acquisition and integration-related, and other costs of approximately $10 million, partially offset by the unfavorable net impact of price and product mix of approximately $15 million.
Previous wording
Flooring ROW—Operating income was $65.6 million for the three months ended June 29, 2024 compared to operating income of $87.0 million for the three months ended July 1, 2023. The change was primarily attributable to the unfavorable net impact of price and product mix of approximately $50 million and higher restructuring, acquisition and integration-related, and other costs of approximately $16 million, partially offset by lower input costs of approximately $30 million and productivity gains of approximately $15 million.
Current wording
Flooring ROW—Operating income was $67.8 million for the three months ended September 28, 2024 compared to operating loss of $159.6 million for the three months ended September 30, 2023. The change was primarily attributable to lower impairment charges to reduce the carrying amount of goodwill and indefinite-lived intangibles of approximately $235 million, partially offset by the unfavorable net impact of price and product mix of approximately $27 million.
Previous wording
Interest expense was $12.6 million for the three months ended June 29, 2024 compared to interest expense of $22.9 million for the three months ended July 1, 2023. The change was primarily attributable to strong cash flow and the resulting lower debt level.
Current wording
Interest expense was $11.2 million for the three months ended September 28, 2024 compared to interest expense of $20.1 million for the three months ended September 30, 2023. The change was primarily attributable to strong cash flow and the resulting lower debt level.
Previous wording
Other expense, net was $1.6 million for the three months ended June 29, 2024 compared to of $2.2 million for the three months ended July 1, 2023. Other expense, net did not significantly change for the three months ended June 29, 2024 from the three months ended July 1, 2023.
Current wording
Other income and expense, net was income of $0.7 million for the three months ended September 28, 2024 compared to other income of $8.5 million for the three months ended September 30, 2023. Other income and expense, net did not significantly change for the three months ended September 28, 2024 from the three months ended September 30, 2023.
Previous wording
For the three months ended June 29, 2024, the Company recorded income tax expense of $42.3 million on a earnings before income taxes of $199.8 million, for an effective tax rate of 21.2%. For the three months ended July 1, 2023, the Company recorded income tax expense of $26.8 million on earnings before income taxes of $128.0 million, for an effective tax rate of 20.9%. The increase in the effective tax rate was primarily driven by higher earnings before taxes and the Company’s geographic dispersion of profits and losses for the respective periods, partially offset by a larger increase in unrecognized tax benefits during the three months ended July 1, 2023.
Current wording
For the three months ended September 28, 2024, the Company recorded income tax expense of $39.8 million on earnings before income taxes of $201.8 million, for an effective tax rate of 19.7%. For the three months ended September 30, 2023, the Company recorded income tax expense of $15.0 million on loss before income taxes of $745.3 million, for an effective tax rate of (2.0)%. The increase in the effective tax rate was primarily driven by a shift from losses before income taxes to earnings before income taxes and the impairment of non-deductible goodwill during the three months ended September 30, 2023.
Previous wording
Six Months Ended June 29, 2024, as compared with Six Months Ended July 1, 2023
Current wording
Nine Months Ended September 28, 2024, as compared with Nine Months Ended September 30, 2023
Previous wording
Net sales for the six months ended June 29, 2024 were $5,480.7 million compared to net sales of $5,756.7 million for the six months ended July 1, 2023. The change was primarily attributable to the unfavorable net impact of price and product mix of approximately $300 million and the unfavorable net impact of foreign exchange rates of approximately $29 million, partially offset by higher sales volume attributable to acquisitions of approximately $48 million and higher legacy sales volume of approximately $19 million.
Current wording
Net sales for the nine months ended September 28, 2024 were $8,199.7 million compared to net sales of $8,522.8 million for the nine months ended September 30, 2023. The change was primarily attributable to the unfavorable net impact of price and product mix of approximately $357 million and the unfavorable net impact of foreign exchange rates of approximately $34 million, partially offset by higher sales volume attributable to acquisitions of approximately $48 million and higher legacy sales volume of approximately $20 million.
Previous wording
Global Ceramic—Net sales for the six months ended June 29, 2024 were $2,160.4 million compared to net sales of $2,214.7 million for the six months ended July 1, 2023. The change was primarily attributable to the unfavorable net impact of price and product mix of approximately $66 million, the unfavorable net impact of foreign exchange rates of approximately $18 million and lower legacy sales volume of approximately $17 million, partially offset by higher sales volume attributable to acquisitions of approximately $48 million.
Current wording
Global Ceramic—Net sales for the nine months ended September 28, 2024 were $3,218.4 million compared to net sales of $3,306.4 million for the nine months ended September 30, 2023. The change was primarily attributable to the unfavorable net impact of price and product mix of approximately $69 million; lower legacy sales volume of approximately $35 million and the unfavorable net impact of foreign exchange rates of approximately $32 million, partially offset by higher sales volume attributable to acquisitions of approximately $48 million.
Previous wording
Flooring NA—Net sales for the three months ended June 29, 2024 were $958.5 million compared to net sales of $1,001.7 million for the three months ended July 1, 2023. The change was primarily attributable to the unfavorable net impact of price and product mix of approximately $49 million.
Current wording
Flooring NA—Net sales for the nine months ended September 28, 2024 were $2,832.7 million compared to net sales of $2,917.3 million for the nine months ended September 30, 2023. The change was primarily attributable to the unfavorable net impact of price and product mix of approximately $99 million.
Previous wording
Gross profit for the three months ended June 29, 2024 was $723.8 million compared to gross profit of $732.0 million for the three months ended July 1, 2023. The change was primarily attributable to the unfavorable net impact of price and product mix and the unfavorable net impact of foreign exchange rates, partially offset by lower input costs and productivity gains. Gross profit did not significantly change as a percentage of net sales for the three months ended June 29, 2024 compared to the three months ended July 1, 2023.
Current wording
Gross profit for the nine months ended September 28, 2024 was $2,065.9 million compared to gross profit of $2,067.4 million for the nine months ended September 30, 2023. The change was primarily attributable to the unfavorable net impact of price and product mix of approximately $332 million, partially offset by lower input costs of approximately $266 million and productivity gains of approximately $117 million. Gross profit did not significantly change as a percentage of net sales for the nine months ended September 28, 2024 compared to the nine month ended September 30, 2023.
Previous wording
Selling, general and administrative expenses for the six months ended June 29, 2024 were $1,012.7 million compared to $1,096.6 million for the six months ended July 1, 2023. The change was primarily attributable to lower legal settlements, reserves and fees. Selling, general and administrative expenses did not significantly change as a percentage of net sales for the six months ended June 29, 2024 compared to the six months ended July 1, 2023.
Current wording
Selling, general and administrative expenses for the nine months ended September 28, 2024 were $1,493.0 million compared to $1,646.2 million for the nine months ended September 30, 2023. The change was primarily attributable to lower legal settlements, reserves and fees of $82 million.
Previous wording
Operating income for the three months ended June 29, 2024 was $214.0 million compared to operating income of $153.1 million for the three months ended July 1, 2023. The change was primarily attributable to lower input costs of approximately $83 million, productivity gains of approximately $49 million and lower legal settlements, reserves and fees of approximately $47 million, partially offset by the unfavorable net impact of price and product mix of approximately $111 million and the unfavorable net impact of foreign exchange rates of approximately $11 million.
Current wording
Operating income for the nine months ended September 28, 2024 was $572.9 million compared to operating loss of $454.9 million for the nine months ended September 30, 2023. The change was primarily attributable to lower impairment charges to reduce the carrying amount of goodwill and indefinite-lived intangibles of approximately $876 million; lower input costs of approximately $234 million; productivity gains of approximately $139 million; lower legal settlements, reserves and fees of approximately $82 million and lower restructuring, acquisition and integration-related, and other costs of approximately $49 million, partially offset by the unfavorable net impact of price and product mix of approximately $334 million.
Previous wording
Global Ceramic—Operating income was $131.9 million for the six months ended June 29, 2024 compared to operating income of $147.3 million for the six months ended July 1, 2023. The change was primarily attributable to the unfavorable net impact of price and product mix of approximately $65 million and the unfavorable net impact of foreign exchange rates of approximately $21 million, partially offset by lower input costs of approximately $50 million and productivity gains of approximately $28 million.
Current wording
Global Ceramic—Operating income was $215.3 million for the nine months ended September 28, 2024 compared to operating loss of $207.9 million for the nine months ended September 30, 2023. The change was primarily attributable to lower impairment charges to reduce the carrying amount of goodwill and indefinite-lived intangibles of approximately $425 million; productivity gains of approximately $50 million and lower input costs of approximately $50 million, partially offset by the unfavorable net impact of price and product mix of approximately $80 million.
Previous wording
Flooring NA—Operating income was $123.3 million for the six months ended June 29, 2024 compared to operating income of $35.2 million for the six months ended July 1, 2023. The change was primarily attributable to lower input costs of approximately $92 million, productivity gains of approximately $42 million and lower restructuring, acquisition and integration-related, and other costs of approximately $21 million, partially offset by the unfavorable net impact of price and product mix of approximately $56 million.
Current wording
Flooring NA—Operating income was $196.3 million for the nine months ended September 28, 2024 compared to operating loss of $131.8 million for the nine months ended September 30, 2023. The change was primarily attributable to lower impairment charges to reduce the carrying amount of goodwill and indefinite-lived intangibles of approximately $216 million; lower input costs of approximately $104 million; productivity gains of approximately $56 million and lower restructuring, acquisition and integration-related, and other costs of approximately $32 million, partially offset by the unfavorable net impact of price and product mix of approximately $84 million.
Previous wording
Flooring ROW—Operating income was $136.5 million for the six months ended June 29, 2024 compared to operating income of $162.2 million for the six months ended July 1, 2023. The change was primarily attributable to the unfavorable net impact of price and product mix of approximately $143 million, partially offset by lower input costs of approximately $78 million and productivity gains of approximately $25 million.
Current wording
Flooring ROW—Operating income was $204.3 million for the nine months ended September 28, 2024 compared to operating income of $2.6 million for the nine months ended September 30, 2023. The change was primarily attributable to lower impairment charges to reduce the carrying amount of goodwill and indefinite-lived intangibles of approximately $235 million; lower input costs of approximately $84 million and productivity gains of approximately $32 million, partially offset by the unfavorable net impact of price and product mix of approximately $170 million.
Previous wording
Interest expense was $27.5 million for the six months ended June 29, 2024 compared to interest expense of $40.0 million for the six months ended July 1, 2023. The change was primarily attributable to strong cash flow and the resulting lower debt level.
Current wording
Interest expense was $38.6 million for the nine months ended September 28, 2024 compared to interest expense of $60.1 million for the nine months ended September 30, 2023. The change was primarily attributable to strong cash flow and the resulting lower debt level.
Previous wording
Other expense, net was $0.5 million for the six months ended June 29, 2024 compared to other expense, net of $1.6 million for the six months ended July 1, 2023. Other expense, net did not significantly change for the six months ended June 29, 2024 from the three months ended July 1, 2023.
Current wording
Other income and expense, net was income of $0.2 million for the nine months ended September 28, 2024 compared to other income of $6.9 million for the nine months ended September 30, 2023. Other income and expense, net did not significantly change for the nine months ended September 28, 2024 from the nine months ended September 30, 2023.
Previous wording
For the six months ended June 29, 2024, the Company recorded income tax expense of $70.1 million on earnings before income taxes of $332.6 million, for an effective tax rate of 21.1%. For the six months ended July 1, 2023, the Company recorded income tax expense of $55.7 million on earnings before income taxes of $237.2 million, for an effective tax rate of 23.5%. The change in the effective tax rate was primarily driven by a larger increase in unrecognized tax benefits and the write-off of an income tax receivable no longer expected during the six months ended July 1, 2023, partially offset by the Company’s geographic dispersion of profits and losses for the respective periods.
Current wording
For the nine months ended September 28, 2024, the Company recorded income tax expense of $109.9 million on earnings before income taxes of $534.5 million, for an effective tax rate of 20.6%. For the nine months ended September 30, 2023, the Company recorded income tax expense of $70.7 million on loss before income taxes of $508.1 million, for an effective tax rate of (13.9)%. The change in the effective tax rate was primarily driven by a shift from losses before income taxes to earnings before income taxes and the impairment of non-deductible goodwill during the nine months ended September 30, 2023.
Previous wording
Net cash provided by operating activities in the first six months of 2024 was $417.3 million, compared to net cash provided by operating activities of $520.9 million in the first six months of 2023. The change was primarily attributable to the change in inventory and accounts receivable, partially offset by the change in accounts payable and higher net earnings.
Current wording
Net cash provided by operating activities in the first nine months of 2024 was $736.9 million, compared to net cash provided by operating activities of $1,032.9 million in the first nine months of 2023. The change was primarily attributable to cash used for inventory and accounts receivable, partially offset by cash provided by higher net earnings and the change in accounts payable.
Previous wording
Net cash used in investing activities in the first six months of 2024 was $178.2 million compared to net cash used in investing activities of $602.6 million in the first six months of 2023. The change was primarily attributable to the decrease in acquisition costs of $515.4 million and the decrease in capital expenditures of $67.0 million, partially offset by the decrease in the redemptions of short-term investments of $158.0 million (net of purchases of short-term investments)
Current wording
Net cash used in investing activities in the first nine months of 2024 was $293.6 million compared to net cash used in investing activities of $730.0 million in the first nine months of 2023. The change was primarily attributable to the decrease in acquisition costs of $515.4 million and the decrease in capital expenditures of $79.0 million, partially offset by the decrease in the redemptions of short-term investments of $158.0 million (net of purchases of short-term investments).
Previous wording
Net cash used in financing activities in the first six months of 2024 was $381.5 million compared to net cash provided by financing activities of $156.3 million in the first six months of 2023. The change was primarily attributable to higher payments of term loan facility of $912.3 million, higher share repurchase of $87.8 million and lower proceeds from Senior Credit Facility of $66.4 million (net of payments), partially offset by the higher proceeds from commercial paper of $517.0 million (net of borrowing).
Current wording
Net cash used in financing activities in the first nine months of 2024 was $651.6 million compared to net cash used in financing activities of $273.8 million in the first nine months of 2023. The change was primarily attributable to higher payments of term loan facility of $912.3 million, lower proceeds from Senior Notes of $600.0 million, higher share repurchase of $87.9 million and lower proceeds from Senior Credit Facility of $35.9 million (net of payments), partially offset by the higher proceeds from commercial paper of $1,239.3 million (net of payments).
Previous wording
As of June 29, 2024, the Company had cash of $497.4 million, of which $283.5 million was in the United States and $213.9 million was in foreign countries. The Company plans to permanently reinvest the cash held outside the United States. The Company believes that its cash and cash equivalents on hand, cash generated from operations and availability under its existing credit facilities will be sufficient to meet its capital expenditure, working capital and debt servicing requirements over at least the next twelve months. The Company continually evaluates its projected needs and may conduct additional debt financings, subject to market conditions, to increase its liquidity and to take advantage of attractive financing opportunities.
Current wording
As of September 28, 2024, the Company had cash of $424.0 million, of which $245.6 million was in the United States and $178.4 million was in foreign countries. The Company plans to permanently reinvest the cash held outside the United States. The Company believes that its cash and cash equivalents on hand, cash generated from operations and availability under its existing credit facilities will be sufficient to meet its capital expenditure, working capital and debt servicing requirements over at least the next twelve months. The Company continually evaluates its projected needs and may conduct additional debt financings, subject to market conditions, to increase its liquidity and to take advantage of attractive financing opportunities.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
During 2022 and 2023, the Company implemented a number of restructuring actions, productivity initiatives and manufacturing enhancements focused on reducing costs to enhance future performance, including certain facility, asset and product rationalizations and workforce reductions. The Company anticipates these projects will deliver annual savings of approximately $150 million, with an estimated cost of approximately $215 million. In 2024, the Company announced further restructuring actions, including additional facility, assets and product rationalizations and workforce reductions to further reduce costs and prepare the business for the future. The Company anticipates these projects will deliver annual savings of approximately $115 million, with an estimated cost of approximately $130 million. Execution timelines will vary by project, with some savings extending into 2026.