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CST: 30/11/2020 22:47:19   

Mohawk Industries Reports Q2 Results

494 Days ago

CALHOUN, Ga., July 25, 2019 (GLOBE NEWSWIRE) -- Mohawk Industries, Inc. (NYSE: MHK) today announced 2019 second quarter net earnings of $202 million and diluted earnings per share (EPS) of $2.79. Adjusted net earnings were $210 million, and EPS was $2.89, excluding restructuring, acquisition and other charges. Net sales for the second quarter of 2019 were $2.6 billion, up 0.3% as reported and 2.4% on a constant currency and days basis. For the second quarter of 2018, net sales were $2.6 billion, net earnings were $197 million and EPS was $2.62, adjusted net earnings were $263 million, and EPS was $3.51, excluding restructuring, acquisition and other charges.

For the six months ending June 29, 2019, net earnings and EPS were $324 million and $4.48, respectively. Net earnings excluding restructuring, acquisition and other charges were $364 million and EPS was $5.04. For the 2019 six-month period, net sales were $5.03 billion, up 0.8% versus prior year as reported or 4% on a constant currency and days basis. For the six-month period ending June 30, 2018, net sales were $4.99 billion, net earnings were $405 million and EPS was $5.41; excluding restructuring, acquisition and other charges, net earnings and EPS were $488 million and $6.52. 

Commenting on Mohawk Industries’ second quarter performance, Jeffrey S. Lorberbaum, Chairman and CEO, stated, “In the second quarter, our business delivered results at the high end of our guidance. The U.S. dollar strengthened compared to the prior year, reducing our translated results for the quarter by approximately $9 million. Most markets we operate in remain soft, with pressure on volume and pricing, and we anticipate the environment to remain difficult.

“Given the uncertainties in our markets, we are taking actions to improve our business. We are streamlining our operations, consolidating facilities and taking out higher cost assets. We are reducing production to control inventory levels, introducing new product categories and increasing promotions to address changing markets. We are reducing overhead structures and controlling investments. We benefited in the period from lower material costs offset by labor and energy costs that continue to rise. We are improving our administrative costs while investing in sales to support new products and enter new geographies. To recover inflation, we have implemented price increases in the first half of the year, though much of the benefit has been offset by mix and competitive pressures.

“While managing these challenges, we are enhancing the long-term value of our business. The utilization of our new investments in the U.S., Europe and Russia is increasing as we broaden our product offering, expand our customer base and add shifts to increase production at the new facilities. The margins of our greenfield projects will increase over time as our sales, production and mix improve and the costs decline. The critical integration of our acquisitions in Australia, New Zealand and Brazil has been largely executed, and our management teams are focused on improving our market position, offerings and cost structure. In each acquisition, we are progressing with new investments to enhance our capabilities and introduce new products. These acquisitions are contributing to our results, as we build a foundation for growth and margin expansion.

“For the quarter, our Global Ceramic Segment sales increased 3% as reported and 5% on a constant currency and days basis. The segment’s operating margin was 12% as reported, declining year over year due to inflation, temporary shutdown costs and marketing investments partially offset by productivity. We believe our ceramic sales are in line with the U.S. market, with our pricing and mix impacted from increased competition and excess inventory. We expect the U.S. ceramic market to remain soft in the second half of the year, and we are taking many actions to improve our sales and costs. We are installing equipment for our new ceramic click installation system, expanding the distribution of our porcelain roofing system and introducing thick porcelain tiles for outdoor applications. We are initiating promotions to increase volume, and we are introducing lower price points to align with the market. Our new quartz countertop plant in Tennessee is ramping up, and we have begun manufacturing more stylized products to increase our sales and mix. In Mexico, we are increasing our distribution, introducing new porcelain collections and supporting stores that only sell Daltile products. In Brazil, our Eliane business is performing well due to our leading brand, premium products and efficient operations. In a difficult ceramic market, our strong presence in retail, home centers and the builder channel is enabling us to grow, partially offset by softer exports. In a slowing European economy, we are growing our ceramic sales, but it has impacted our margins and mix. To expand further, we have reorganized our European sales organization to focus on smaller geographic areas and specific channels, and we are using private label programs to optimize our market penetration. To improve our efficiencies, actions to reduce manufacturing and SG&A costs are being completed. Despite a weaker ceramic market, our Russian business continued to have strong growth, with our premium products improving our mix. The new capacity we recently installed is being fully utilized to support our higher sales.

“During the quarter, our Flooring North America Segment’s sales decreased 7%. The segment’s operating margin was 6% as reported. As expected, operating income for the segment declined due to lower volume, inflation and ramp up cost of LVT. Paul de Cock, the segment president, has completed his management reorganization, and the new team is in place and is enhancing the strategies and execution. Relative to last year, sales were softer in most categories as customers traded down, and price increases were offset by a declining product mix. We have made significant progress on our cost improvement actions, including replacing inefficient extrusion and closing four higher cost operations. Residential carpet sales have declined, and lower cost polyester carpet is taking share and impacting our mix. We are increasing our promotional activity, and we have introduced new products to defend our market position. Our commercial carpet tile business continues to grow as we introduce innovative styling as well as new pattern technologies. Our water-proof laminate products with enhanced visuals and textures are improving our mix and average selling price. We are adding our unique water-proof technology to all of our production lines and upgrading our HDF manufacturing to increase our capacity and reduce our cost. We are making substantial progress with our LVT manufacturing, with production increasing more than 30% in the period. As we proceed through the year we anticipate further improvement in production and cost, as well as introducing new features that are being developed in Europe. We will further expand our sales in LVT as we introduce new visuals and features from our operations.

“For the quarter, our Flooring Rest of the World Segment’s sales increased 9% as reported and 15% on a constant currency basis. The segment’s operating margin was 16% as reported and 17% on an adjusted basis, due to volume growth and lower inflation partially offset by price and mix. Even with softening economies, the segment is performing well due to our investments in product innovation, cost improvements and new businesses, including European LVT and carpet tile and Russian sheet vinyl. Our European laminate business is growing due to our unique surface technologies and water-resistance in our premium Quick-Step and Pergo brands. Our two original European LVT lines are performing well and are providing us with competitive advantages. Our new third LVT line dramatically improved during the period, with production speeds, efficiency and yields increasing substantially. The higher output is supporting new introductions that will expand our business. Our new sheet vinyl plant in Russia is ramping up with productivity and quality similar to our established operations. We are expanding our Russian customer base and product offering to grow our volume and achieve our expected results. The European panel market has slowed, impacting volume and margins. To strengthen our position, we are introducing innovative products and reducing our costs. Our insulation business is performing well as our polyurethane product takes share from other alternatives. To enhance our position in Australia and New Zealand, we are launching many new soft and hard surface products that utilize concepts from our other geographies. We have closed high cost yarn production in Australia, and we are installing new carpet tile equipment to expand our commercial sales.

“The general conditions in our flooring markets around the world have become more challenging, and competition is more intense. We are taking actions to improve our sales, reduce our costs, manage our inventory and adjust our offerings. The U.S. flooring market is the most difficult, and we are taking actions to increase our volume and reduce our cost. In U.S. ceramic, lower demand and purchases ahead of tariffs have created excess inventory in the market, which is impacting sales and margins. Our LVT production has increased substantially in the U.S. and Europe and will continue to improve through the year as we introduce more sophisticated technology. Our Flooring ROW Segment is delivering solid results despite softening markets. Our new plants in the U.S., Europe and Russia have made substantial progress increasing production and we are increasing our sales to achieve our planned results over time. Taking all of this into account, our EPS guidance for the third quarter is $2.58 to $2.68, excluding any one-time charges.

“As we manage through the current conditions impacting the flooring sector, we are focused on optimizing the long-term growth and profitability of our business. We are implementing numerous changes that will enhance our future results. We have leading positions in our products and markets and our new investments will provide solid returns when further developed. Our balance sheet and cashflow are strong with our net debt to adjusted EBITDA at 1.8X, which will further decrease by the end of the year.”

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, Feltex, Godfrey Hirst, IVC, Karastan, Marazzi, Mohawk, Mohawk Group, Pergo, Quick-Step and Unilin. 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, India, 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 raw material prices and other input costs; inflation and deflation in consumer markets; 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; and other risks identified in Mohawk’s SEC reports and public announcements.

Conference call Friday, July 26, 2019, at 11:00 AM Eastern Time
The telephone number is 1-800-603-9255 for US/Canada and 1-706-634-2294 for International/Local. Conference ID # 8037996. A replay will be available until August 25, 2019, by dialing 1-855-859-2056 for US/local calls and 1-404-537-3406 for International/Local calls and entering Conference ID # 8037996.

 

MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES                
(Unaudited)                
Condensed Consolidated Statement of Operations Data   Three Months Ended   Six Months Ended
(Amounts in thousands, except per share data)   June 29, 2019   June 30, 2018   June 29, 2019   June 30, 2018
                 
Net sales   $   2,584,485       2,577,014         5,026,975       4,989,216  
Cost of sales       1,847,867       1,810,459         3,665,430       3,517,969  
  Gross profit       736,618       766,555         1,361,545       1,471,247  
Selling, general and administrative expenses       469,758       440,248         929,355       876,541  
Operating income       266,860       326,307         432,190       594,706  
Interest expense       10,521       7,863         20,994       15,391  
Other (income) expense, net       (3,048 )     2,090         (6,784 )     6,088  
  Earnings before income taxes       259,387       316,354         417,980       573,227  
Income tax expense       56,733       118,809         93,751       166,441  
  Net earnings including noncontrolling interest       202,654       197,545         324,229       406,786  
Net income attributable to noncontrolling interest       213       959         203       1,434  
Net earnings attributable to Mohawk Industries, Inc.   $   202,441       196,586         324,026       405,352  
                 
Basic earnings per share attributable to Mohawk Industries, Inc.                
Basic earnings per share attributable to Mohawk Industries, Inc.   $   2.80       2.64         4.50       5.44  
Weighted-average common shares outstanding - basic       72,402       74,597         71,970       74,525  
                 
Diluted earnings per share attributable to Mohawk Industries, Inc.                
Diluted earnings per share attributable to Mohawk Industries, Inc.   $   2.79       2.62         4.48       5.41  
Weighted-average common shares outstanding - diluted       72,680       74,937         72,250       74,928  
                 
                 
                 
Other Financial Information                
(Amounts in thousands)                
Net cash provided by operating activities   $   396,190       437,758         566,327       620,986  
Depreciation and amortization   $   140,482       127,048         277,773       249,702  
Capital expenditures   $   144,111       247,418         281,059       498,354  
                 
Condensed Consolidated Balance Sheet Data                
(Amounts in thousands)                
            June 29, 2019   June 30, 2018
ASSETS                
Current assets:                
  Cash and cash equivalents           $   128,096       518,226  
  Receivables, net               1,819,474       1,737,935  
  Inventories               2,367,631       2,061,204  
  Prepaid expenses and other current assets               493,116       456,315  
  Total current assets             4,808,317     4,773,680  
Property, plant and equipment, net               4,714,306       4,421,073  
Right of use operating lease assets
              343,716       -  
Goodwill               2,565,702       2,447,046  
Intangible assets, net               950,624       858,532  
Deferred income taxes and other non-current assets               423,437       393,708  
  Total assets           $   13,806,102       12,894,039  
LIABILITIES AND STOCKHOLDERS' EQUITY                
Current liabilities:                
Current portion of long-term debt and commercial paper           $   1,891,512       1,146,511  
Accounts payable and accrued expenses               1,713,934       1,589,561  
Current operating lease liabilities               100,345       -  
  Total current liabilities               3,705,791       2,736,072  
Long-term debt, less current portion               1,169,489       1,884,023  
Non-current operating lease liabilities               249,844       -  
Deferred income taxes and other long-term liabilities               859,387       870,467  
  Total liabilities               5,984,511       5,490,562  
Redeemable noncontrolling interest               -       30,043  
Total stockholders' equity               7,821,591       7,373,434  
  Total liabilities and stockholders' equity           $   13,806,102       12,894,039  
                 
Segment Information   Three Months Ended   As of or for the Six Months Ended
(Amounts in thousands)   June 29, 2019   June 30, 2018   June 29, 2019   June 30, 2018
                 
Net sales:                
  Global Ceramic   $   958,031       929,297         1,856,383       1,805,845  
  Flooring NA       983,439       1,057,570         1,905,419       2,007,928  
  Flooring ROW       643,015       590,147         1,265,173       1,175,443  
  Intersegment sales       -       -         -       -  
  Consolidated net sales   $   2,584,485       2,577,014         5,026,975       4,989,216  
                 
Operating income (loss):                
  Global Ceramic   $   118,141       134,760         202,476       248,177  
  Flooring NA       59,502       100,662         60,151       175,410  
  Flooring ROW       101,533       100,166         191,964       189,226  
  Corporate and intersegment eliminations       (12,316 )     (9,281 )       (22,401 )     (18,107 )
  Consolidated operating income   $   266,860       326,307         432,190       594,706  
                 
Assets:                
  Global Ceramic           $   5,661,364       4,974,791  
  Flooring NA               4,024,428       3,927,190  
  Flooring ROW               3,858,264       3,701,419  
  Corporate and intersegment eliminations               262,046       290,639  
  Consolidated assets           $   13,806,102       12,894,039  

 

Reconciliation of Net Earnings 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.  
(Amounts in thousands, except per share data)                      
        Three Months Ended   Six Months Ended    
        June 29, 2019   June 30, 2018   June 29, 2019   June 30, 2018    
Net earnings attributable to Mohawk Industries, Inc.   $   202,441       196,586       324,026       405,352      
Adjusting items:                        
Restructuring, acquisition and integration-related and other costs       8,840       16,042       48,335       38,146      
Acquisitions purchase accounting , including inventory step-up       1,164       194       3,716       1,548      
Release of indemnification asset         -       -       -        1,749      
Income taxes - reversal of uncertain tax position       -       -       -        (1,749 )    
Income taxes            (2,701 )     50,106       (11,853 )     43,166      
Adjusted net earnings attributable to Mohawk Industries, Inc.   $   209,744       262,928       364,224       488,212      
                         
Adjusted diluted earnings per share attributable to Mohawk Industries, Inc.    $   2.89       3.51       5.04       6.52      
Weighted-average common shares outstanding - diluted         72,680       74,937       72,250       74,928      
                         
 
                         
                         
Reconciliation of Total Debt to Net Debt                      
(Amounts in thousands)                        
        June 29, 2019                
Current portion of long-term debt and commercial paper   $   1,891,512                  
Long-term debt, less current portion         1,169,489                  
Less: Cash and cash equivalents         128,096                  
Net Debt       $   2,932,905                  
                         
Reconciliation of Operating Income to Adjusted EBITDA                    
(Amounts in thousands)                       Trailing Twelve
        Three Months Ended   Months Ended
        September 29, 2018   December 31, 2018   March 30, 2019   June 29, 2019   June 29, 2019
Operating income       $   287,244       213,376       165,330       266,860       932,810  
Other (Expense)/ Income           (706 )     (504 )     3,736       3,048       5,574  
Net (income) loss attributable to noncontrolling interest       (1,013 )     (704 )     10       (213 )     (1,920 )
Depreciation and amortization         132,972       139,092       137,291       140,482       549,837  
EBITDA           418,497       351,260       306,367       410,177       1,486,301  
Restructuring, acquisition and integration-related and other costs       19,890       20,412       39,495       8,840       88,637  
Acquisitions purchase accounting, including inventory step-up       7,090       6,721       2,552       1,164       17,527  
Release of indemnification asset         -        2,857       -        -        2,857  
  Adjusted EBITDA        $   445,477       381,250       348,414       420,181       1,595,322  
                         
Net Debt to Adjusted EBITDA                         1.8  
                         
                         
                         
                         
Reconciliation of Net Sales to Net Sales on a Constant Exchange Rate and on Constant Shipping Days Excluding Acquisition Volume                
(Amounts in thousands)                        
        Three Months Ended   Six Months Ended    
        June 29, 2019   June 30, 2018   June 29, 2019   June 30, 2018    
Net sales       $   2,584,485       2,577,014       5,026,975       4,989,216      
Adjustment to net sales on constant shipping days       2,833       -       38,514       -      
Adjustment to net sales on a constant exchange rate       51,209       -       124,354       -      
Net sales on a constant exchange rate and constant shipping days       2,638,527       2,577,014       5,189,843       4,989,216      
Less: impact of acquisition volume         (135,104 )     -       (254,995 )     -      
Net sales on a constant exchange rate and constant shipping days excluding acquisition volume   $   2,503,423       2,577,014       4,934,848       4,989,216      
                         
                         
                         
Reconciliation of Segment Net Sales to Segment Net Sales on a Constant Exchange Rate and on Constant Shipping Days Excluding Acquisition Volume            
(Amounts in thousands)                        
        Three Months Ended   Six Months Ended    
Global Ceramic       June 29, 2019   June 30, 2018   June 29, 2019   June 30, 2018    
Net sales       $   958,031       929,297       1,856,383       1,805,845      
Adjustment to net sales on constant shipping days       2,833       -       14,382       -      
Adjustment to segment net sales on a constant exchange rate       17,235       -       44,114       -      
Segment net sales on a constant exchange rate and constant shipping days       978,099       929,297       1,914,879       1,805,845      
Less: impact of acquisition volume         (53,722 )     -       (104,718 )     -      
Segment net sales on a constant exchange rate and constant shipping days excluding acquisition volume   $   924,377       929,297       1,810,161       1,805,845      
                         
                         
                         
Reconciliation of Segment Net Sales to Segment Net Sales on Constant Shipping Days                      
(Amounts in thousands)                        
        Three Months Ended   Six Months Ended    
Flooring NA       June 29, 2019   June 30, 2018   June 29, 2019   June 30, 2018    
Net sales       $   983,439       1,057,570       1,905,419       2,007,928      
Adjustment to net sales on constant shipping days       -       -       14,635       -      
Segment net sales on constant shipping days    $   983,439       1,057,570       1,920,054       2,007,928      
                         
Reconciliation of Segment Net Sales to Segment Net Sales on a Constant Exchange Rate and on Constant Shipping Days Excluding Acquisition Volume            
(Amounts in thousands)                        
        Three Months Ended   Six Months Ended    
Flooring ROW       June 29, 2019   June 30, 2018   June 29, 2019   June 30, 2018    
Net sales       $   643,015       590,147       1,265,173       1,175,443      
Adjustment to net sales on constant shipping days       -       -       9,497       -      
Adjustment to segment net sales on a constant exchange rate       33,975       -       80,240       -      
Segment net sales on a constant exchange rate and constant shipping days       676,990       590,147       1,354,910       1,175,443      
Less: impact of acquisition volume         (81,382 )     -       (150,277 )     -      
Segment net sales on a constant exchange rate and constant shipping days excluding acquisition volume   $   595,608       590,147       1,204,633       1,175,443      
                         
                         
                         
Reconciliation of Gross Profit to Adjusted Gross Profit                    
(Amounts in thousands)                        
        Three Months Ended            
        June 29, 2019   June 30, 2018            
Gross Profit       $   736,618       766,555              
Adjustments to gross profit:                        
Restructuring, acquisition and integration-related and other costs       5,867       12,018              
Acquisitions purchase accounting, including inventory step-up       1,164       194              
  Adjusted gross profit       $   743,649       778,767              
                         
                         
                         
Reconciliation of Selling, General and Administrative Expenses to Adjusted Selling, General and Administrative Expenses                
(Amounts in thousands)                        
        Three Months Ended            
        June 29, 2019   June 30, 2018            
Selling, general and administrative expenses     $   469,758       440,248              
Adjustments to selling, general and administrative expenses:                    
Restructuring, acquisition and integration-related and other costs       (3,068 )     (4,024 )            
  Adjusted selling, general and administrative expenses   $   466,690       436,224              
                         
                         
                         
Reconciliation of Operating Income to Adjusted Operating Income                    
(Amounts in thousands)                        
        Three Months Ended            
        June 29, 2019   June 30, 2018            
Operating income       $   266,860       326,307              
Adjustments to operating income:                      
Restructuring, acquisition and integration-related and other costs       8,935       16,042              
Acquisitions purchase accounting, including inventory step-up       1,164       194              
Adjusted operating income       $   276,959       342,543              
                         
                         
                         
Reconciliation of Segment Operating Income to Adjusted Segment Operating Income                    
(Amounts in thousands)                        
        Three Months Ended            
Global Ceramic       June 29, 2019   June 30, 2018            
Operating income       $   118,141       134,760              
Adjustments to segment operating income:                      
Restructuring, acquisition and integration-related and other costs       653       5,408              
Adjusted segment operating income     $   118,794       140,168              
                         
                         
                         
Reconciliation of Segment Operating Income to Adjusted Segment Operating Income                      
(Amounts in thousands)                        
        Three Months Ended            
Flooring NA         June 29, 2019   June 30, 2018            
Operating income       $   59,502       100,662              
Adjustments to segment operating income:                      
Restructuring, acquisition and integration-related and other costs       3,352       8,881              
  Adjusted segment operating income     $   62,854       109,543              
                         
                         
                         
Reconciliation of Segment Operating Income to Adjusted Segment Operating Income and Adjusted Segment Operating Income on a Constant Exchange Rate            
(Amounts in thousands)                        
        Three Months Ended            
Flooring ROW         June 29, 2019   June 30, 2018            
Operating income       $   101,533       100,166              
Adjustments to segment operating income:                      
Restructuring, acquisition and integration-related and other costs       4,412       1,338              
Acquisitions purchase accounting, including inventory step-up       1,164       194              
Adjusted segment operating income     $   107,109       101,698              
Adjustment to operating income on a constant exchange rate       5,765       -              
  Adjusted segment operating income on a constant exchange rate   $   112,874       101,698              
                         
                         
                         
Reconciliation of Earnings including Noncontrolling Interests Before Income Taxes to Adjusted Earnings Including Noncontrolling Interests Before Income Taxes            
(Amounts in thousands)                        
        Three Months Ended            
        June 29, 2019   June 30, 2018            
Earnings before income taxes       $   259,387       316,354              
Noncontrolling interests           (213 )     (959 )            
Adjustments to earnings including noncontrolling interests before income taxes:                    
Restructuring, acquisition and integration-related and other costs       8,840       16,042              
Acquisitions purchase accounting, including inventory step-up       1,164       194              
 Adjusted earnings including noncontrolling interests before income taxes   $   269,178       331,631              
                         
                         
                         
                         
Reconciliation of Income Tax Expense to Adjusted Income Tax Expense                      
(Amounts in thousands)                        
        Three Months Ended            
        June 29, 2019   June 30, 2018            
Income tax expense        $   56,733       118,809              
Income tax effect of adjusting items           2,701       (50,106 )            
  Adjusted income tax expense     $   59,434       68,703              
                         
Adjusted income tax rate         22.1 %   20.7 %            
                         
                         
                         
                         
                         
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 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, acquisition purchase accounting, including inventory step-up, release of indemnification assets and the reversal of uncertain tax positions.    

Contact:         Glenn Landau, Chief Financial Officer (706) 624-2025

 

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