The Calhoun, Ga.-based carpet and tile company (NYSE: MHK) reported net income of $71.1 million on $1.9 billion in sales, compared with net income of $70 million on $1.5 billion in sales in the first quarter of 2005. Earnings were $1.04 a share, up from earnings of $1.03 a share in the first quarter of 2005.
The results for the first quarter of 2006 include a $3 million stock option charge that was not required in 2005 and a $14 million non-cash (Last In, First Out) LIFO charge.
"The results for the quarter were in line with our guidance that we revised earlier," said Jeffrey S. Lorberbaum, Mohwak chairman and CEO. "The revision was attributable to our Mohawk segment which was negatively impacted by a $14 million non-cash LIFO charge as well as lower sales growth and margins in the residential replacement carpet category. The slower carpet industry sales also impacted pricing on some opening price point products more than we anticipated. Our material costs moderated slightly from the high levels after the hurricanes and remained relatively stable through the quarter."