• Mohawk Industries Reports Q4 Results

    ソース: Nasdaq GlobeNewswire / 10 2 2022 16:10:00   America/New_York

    CALHOUN, Ga., Feb. 10, 2022 (GLOBE NEWSWIRE) -- Mohawk Industries, Inc. (NYSE: MHK) today announced a 2021 fourth quarter net earnings of $189 million and diluted earnings per share (EPS) of $2.80. Adjusted net earnings were $199 million, and EPS was $2.95, excluding restructuring, acquisition, and other charges. Net sales for the fourth quarter of 2021 were $2.8 billion, an increase of 4.5% as reported and 11.8% on a constant currency and days basis. For the fourth quarter of 2020, net sales were $2.6 billion, net earnings were $248 million and EPS was $3.49. Adjusted net earnings were $252 million, and EPS was $3.54, excluding restructuring, acquisition, and other charges.

    For the twelve months ending December 31, 2021, net earnings and EPS were $1,033 million and $14.94, respectively. Net earnings excluding restructuring, acquisition and other charges were $1,027 million and EPS was $14.86. For the 2021 twelve-month period, net sales were $11.2 billion, an increase of 17.3% versus prior year as reported or 16% on a constant currency and days basis. For the twelve-month period ending December 31, 2020, net sales were approximately $9.6 billion, net earnings were $516 million and EPS was $7.22; excluding restructuring, acquisition, and other charges, net earnings and EPS were $631 million and $8.83, respectively.

    Commenting on Mohawk Industries’ fourth quarter and full year performance, Jeffrey S. Lorberbaum, Chairman and CEO, stated, “For the full year, Mohawk’s business improved significantly. Our operating margin for the year rose dramatically to approximately 12%. Our 2021 adjusted operating income approached $1.4 billion with adjusted EBITDA exceeding $1.9 billion. In addition, we achieved 12% organic sales growth and improved our adjusted margin by 270 basis points versus our 2019 pre-pandemic results. We ended the year with a historically strong balance sheet, and during the fourth quarter we purchased approximately 2.4 million additional shares of our stock, for a total of approximately 4.9 million shares purchased during the full year. In February, the board of directors approved an additional authorization for share repurchases of $500 million reiterating our confidence in the company’s strength and to enhance shareholder return.

    “Our fourth quarter sales remained strong, driven by a robust residential new construction and remodeling environment. Commercial sales improved as well, though they still lagged pre-pandemic levels. Earnings in the quarter benefited from improved price, mix and productivity, offset by increased inflation and lower volume from fewer days in the quarter compared to the prior year, which included abnormal seasonal demand.

    “For the quarter, our Flooring Rest of World Segment net sales increased 5% as reported or approximately 14% on a constant days and currency basis. The Segment’s operating margin was 14.4% as reported and 14.8% on an adjusted basis, impacted by inflation, fewer shipping days and supply chain constraints, partially offset by pricing and mix gains during the quarter. Beginning in the third quarter, the segment’s material costs began escalating at an unpredictable pace due to the impact of electricity, gas and material shortages. Despite multiple pricing actions to recover, we are still lagging inflation and have announced further price increases to offset these extraordinary circumstances. We will continue to monitor and take further actions as required. To maximize our growing premium laminate sales, we expanded our press capacity last year, and we are investing in a new line that will support $150 million of additional sales when operational towards the end of 2023. We are continuing to enhance our LVT processes, even as we experience shortages that limited our production and sales. Throughout this year, we will optimize our bolt-on acquisitions of a French MDF facility, and an Irish insulation manufacturer by integrating them with our existing operations and upgrading their assets and processes.

    “In the fourth quarter, our Global Ceramic segment sales increased 3% as reported and 10% on a constant days and currency basis. The Segment’s operating margin was 6.3%, as a result of productivity, pricing and mix improvements offset by the European gas crisis, inflation and more normal seasonality. Mexico, Brazil and Russia outperformed in the quarter, even though sales in those regions were constrained by capacity limitations. We grew sales and improved mix with our innovative floor, wall and mosaic offerings, quartz and porcelain slabs, as well as expanding our position in exterior products. Inflation in material, labor and energy continue to impact our ceramic markets, and we are taking additional pricing actions to recover. In Europe, natural gas prices are presently more than five times higher than last year and we anticipate our pricing aligning with our costs in the second half of this year. Future European energy prices will depend on stability in the region and whether Russia increases supply. As the world’s largest producer of ceramic tile, Mohawk has many opportunities to leverage our position and grow long-term sales and profits. In Brazil we are constructing a new porcelain tile facility that should be starting up the second half of next year. In Mexico, we are expanding our production of mosaics and specialty products. In Russia, we are increasing our porcelain tile capacity with a new production line this year and another line in 2023. In Europe, we are adding capacity to expand our porcelain slab, outdoor and specialty tile businesses and in the U.S., we are increasing our quartz countertop production. Collectively, these expansions will support additional sales of approximately $300 million when all the lines are fully operational.

    “In the quarter, our Flooring North America segment sales increased 5% as reported or 12% on a constant basis, and operating margin was 9% as a result of productivity, pricing and mix improvements partially offset by inflation and a return to more normal seasonality. The success of our differentiated products benefited our mix, though some consumers did trade down to offset inflation. In the quarter, we increased prices again due to higher energy and material inflation. Mohawk is the leader in the U.S. laminate market, and we have reinvigorated the product category in all channels with improved visuals and waterproof performance. We are increasing our laminate capacity to support $300 million of additional sales, and the first expansion phase is starting up this quarter with the second phase following in 2023. LVT remains the fastest growing flooring product in the market, and our LVT business delivered strong growth in the fourth quarter, as we continued to improve production at our existing facility. We are starting up a new LVT operation to support sales of over $160 million. The first equipment in the plant is being installed now, and the project will be completed in phases through the second half of 2023. In addition to these capacity increases, we also have many cost-saving investments, including fiber manufacturing and transportation projects, that will improve productivity and profitability within the segment over the next two to three years.

    “After our record-setting 2021, we are enthusiastic about Mohawk’s future growth and profitability. This year, GDP is expected to grow 3 to 5% in most of our markets, with residential sales remaining strong and commercial improving. Interest rates will likely rise but should remain historically favorable and support continued home sales and remodeling. During the year we anticipate inflation moderating, and constraints in labor, material and energy declining. We are selling all of our capacity in many product categories and are optimizing our mix and margins this year. We have initiated multiple expansion projects to increase our sales in these growing areas this year and beyond. Significant short-term material, energy and transportation inflation is affecting all our businesses, and we are reengineering formulations, reducing spending and improving efficiencies to offset. We are presently implementing price increases and have announced additional ones across our products and geographies. We will continue to adjust our pricing as necessary and will recover our margins over time. In Europe, energy costs have dramatically accelerated and have also affected the cost of our materials. Our European ceramic business has been the most impacted, which we anticipate will create a $40-$45 million headwind, net of price increases, in the first quarter. Given these factors, we anticipate our first quarter adjusted EPS to be $2.90 to $3.00, excluding any restructuring charges. In the second half, we expect our margins to improve as capacity expands, inflation moderates and pricing aligns.

    “Based on the strength of our company, our product and geographic diversity, investments in growing categories and potential acquisitions, our long-range outlook is for higher sales growth and margin expansion. Flooring is an essential part of new construction and remodeling, and, as the world’s largest flooring manufacturer, Mohawk has built leading positions in the major flooring categories and key markets around the globe. Given this, we expect our business to benefit from strong demand through this economic cycle. With today’s low inventory of existing homes, new residential construction and remodeling should remain high for many years. In time, we expect the commercial sector to return to its historical growth with pent-up demand representing a significant opportunity. Mohawk’s sustainable products enhance both our distribution and bottom line by appealing to today’s environmentally conscious end users. During the fourth quarter, we released our annual environmental, sustainability and governance report, which details Mohawk’s commitment to product circularity and decarbonization; it is available on our investor website. In addition to expanding capacity, we continue to invest in our organization’s talent and state-of-the-art technology to deliver exceptional design, value and service to our customers. Over the next three years, we anticipate higher sales and margins as we implement our product, manufacturing and marketing initiatives. We will continue to leverage our strong balance sheet to pursue acquisitions that further our geographic reach and product offering while growing our sales and profitability.”

    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, Malaysia, Mexico, New Zealand, Russia and the United States.

    Certain of the statements in the immediately preceding paragraphs, particularly those anticipating future performance, business prospects, growth and operating strategies and similar matters and those that include the words “could,” “should,” “believes,” “anticipates,” “expects,” and “estimates,” or similar expressions constitute “forward-looking statements.” For those statements, Mohawk claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. There can be no assurance that the forward-looking statements will be accurate because they are based on many assumptions, which involve risks and uncertainties. The following important factors could cause future results to differ: changes in economic or industry conditions; competition; inflation and deflation in freight, raw material prices and other input costs; inflation and deflation in consumer markets; currency fluctuations; energy costs and supply; timing and level of capital expenditures; timing and implementation of price increases for the Company’s products; impairment charges; integration of acquisitions; international operations; introduction of new products; rationalization of operations; taxes and tax reform, product and other claims; litigation; the risks and uncertainty related to the COVID-19 pandemic; regulatory and political changes in the jurisdictions in which the Company does business and other risks identified in Mohawk’s SEC reports and public announcements.

    Conference call Friday, February 11, 2022, at 11:00 AM Eastern Time

    The telephone number is 1-800-603-9255 for U.S./Canada and 1-706-634-2294 for International/Local. Conference ID # 6194374. A replay will be available until March 11, 2022, by dialing 1-855-859-2056 for U.S./local calls and 1-404-537-3406 for International/Local calls and entering Conference ID # 6194374.

    MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES        
    (Unaudited)        
    Condensed Consolidated Statement of Operations Data Three Months Ended Twelve Months Ended
    (Amounts in thousands, except per share data) December 31, 2021 December 31, 2020 December 31, 2021 December 31, 2020
             
    Net sales $2,760,737  2,641,764   11,200,613  9,552,197 
    Cost of sales  2,023,294  1,903,680   7,931,879  7,121,507 
    Gross profit  737,443  738,084   3,268,734  2,430,690 
    Selling, general and administrative expenses  484,345  455,351   1,933,723  1,794,688 
    Operating income  253,098  282,733   1,335,011  636,002 
    Interest expense  12,169  15,897   57,252  52,379 
    Other (income) expense, net  1,140  (6,742)  (12,234) (751)
    Earnings before income taxes  239,789  273,578   1,289,993  584,374 
    Income tax expense  50,689  25,180   256,445  68,647 
    Net earnings including noncontrolling interests  189,100  248,398   1,033,548  515,727 
    Net earnings attributable to noncontrolling interests  11  176   389  132 
    Net earnings attributable to Mohawk Industries, Inc. $189,089  248,222   1,033,159  515,595 
             
    Basic earnings per share attributable to Mohawk Industries, Inc.        
    Basic earnings per share attributable to Mohawk Industries, Inc. $2.81  3.50   15.01  7.24 
    Weighted-average common shares outstanding - basic  67,209  70,951   68,852  71,214 
             
    Diluted earnings per share attributable to Mohawk Industries, Inc.        
    Diluted earnings per share attributable to Mohawk Industries, Inc. $2.80  3.49   14.94  7.22 
    Weighted-average common shares outstanding - diluted  67,535  71,209   69,145  71,401 
             
             
             
    Other Financial Information        
    (Amounts in thousands)        
    Net cash provided by operating activities $212,384  407,844   1,309,119  1,769,839 
    Less: Capital expenditures  300,941  160,142   676,120  425,557 
    Free cash flow $(88,557) 247,702   632,999  1,344,282 
             
    Depreciation and amortization $143,411  156,555   591,711  607,507 
             
     
    Condensed Consolidated Balance Sheet Data  
    (Amounts in thousands)      
        December 31, 2021 December 31, 2020
    ASSETS      
    Current assets:      
    Cash and cash equivalents   $268,895  768,625 
    Short-term investments    323,000  571,741 
    Receivables, net    1,839,985  1,709,493 
    Inventories    2,391,672  1,913,020 
    Prepaid expenses and other current assets    414,805  400,775 
    Total current assets    5,238,357  5,363,654 
    Property, plant and equipment, net    4,636,865  4,591,229 
    Right of use operating lease assets    389,967  323,138 
    Goodwill    2,607,909  2,650,831 
    Intangible assets, net    899,980  951,607 
    Deferred income taxes and other non-current assets    451,439  447,292 
    Total assets   $14,224,517  14,327,751 
    LIABILITIES AND STOCKHOLDERS' EQUITY      
    Current liabilities:      
    Short-term debt and current portion of long-term debt   $624,503  377,255 
    Accounts payable and accrued expenses    2,217,418  1,895,951 
    Current operating lease liabilities    104,434  98,042 
    Total current liabilities    2,946,355  2,371,248 
    Long-term debt, less current portion    1,700,282  2,356,887 
    Non-current operating lease liabilities    297,390  234,726 
    Deferred income taxes and other long-term liabilities    852,274  823,732 
    Total liabilities    5,796,301  5,786,593 
    Total stockholders' equity    8,428,216  8,541,158 
    Total liabilities and stockholders' equity   $14,224,517  14,327,751 
             
    Segment Information Three Months Ended As of or for the Twelve Months Ended
    (Amounts in thousands) December 31, 2021 December 31, 2020 December 31, 2021 December 31, 2020
             
    Net sales:        
    Global Ceramic $949,501  919,668   3,917,319  3,432,756 
    Flooring NA  1,015,513  963,365   4,116,405  3,594,075 
    Flooring ROW  795,723  758,731   3,166,889  2,525,366 
    Consolidated net sales $2,760,737  2,641,764   11,200,613  9,552,197 
             
    Operating income (loss):        
    Global Ceramic $60,000  79,565   403,135  167,731 
    Flooring NA  91,711  82,407   407,577  147,442 
    Flooring ROW  114,339  132,505   571,126  366,934 
    Corporate and intersegment eliminations  (12,952) (11,744)  (46,827) (46,105)
    Consolidated operating income $253,098  282,733   1,335,011  636,002 
             
    Assets:        
    Global Ceramic     $5,160,776  5,250,069 
    Flooring NA      4,125,960  3,594,976 
    Flooring ROW      4,361,741  4,194,447 
    Corporate and intersegment eliminations      576,040  1,288,259 
    Consolidated assets     $14,224,517  14,327,751 
             
     


    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 Twelve Months Ended  
      December 31, 2021 December 31, 2020 December 31, 2021 December 31, 2020  
    Net earnings attributable to Mohawk Industries, Inc. $189,089  248,222  1,033,159  515,595   
    Adjusting items:          
    Restructuring, acquisition and integration-related and other costs  4,558  22,382  23,118  166,817   
    Acquisitions purchase accounting, including inventory step-up  1,067  -  1,749  -   
    Resolution of foreign non-income tax contingencies  -  -  (6,211) -   
    Income tax effect on resolution of foreign non-income tax contingencies  -  -  2,302  -   
    One-time tax planning election  4,568  -  (22,163) -   
    Income taxes  (309) (18,596) (4,626) (51,740)  
    Adjusted net earnings attributable to Mohawk Industries, Inc. $198,973  252,008  1,027,328  630,672   
               
    Adjusted diluted earnings per share attributable to Mohawk Industries, Inc. $2.95  3.54  14.86  8.83   
    Weighted-average common shares outstanding - diluted  67,535  71,209  69,145  71,401   
               
               
    Reconciliation of Total Debt to Net Debt Less Short-Term Investments          
    (Amounts in thousands)          
      December 31, 2021        
    Short-term debt and current portion of long-term debt $624,503         
    Long-term debt, less current portion  1,700,282         
    Total debt  2,324,785         
    Less: Cash and cash equivalents  268,895         
    Net Debt  2,055,890         
    Less: Short-term investments  323,000         
    Net debt less short-term investments $1,732,890         
               
               
    Reconciliation of Operating Income to Adjusted EBITDA          
    (Amounts in thousands)         Trailing Twelve
      Three Months Ended Months Ended
      April 3, 2021 July 3, 2021 October 2, 2021 December 31, 2021 December 31, 2021
    Operating income $317,515  404,424  359,974  253,098  1,335,011 
    Other income (expense)  2,227  11,168  (21) (1,140) 12,234 
    Net income attributable to noncontrolling interests  (4) (168) (206) (11) (389)
    Depreciation and amortization (1)  151,216  148,466  148,618  143,411  591,711 
    EBITDA  470,954  563,890  508,365  395,358  1,938,567 
    Restructuring, acquisition and integration-related and other costs  5,756  3,321  982  4,641  14,700 
    Acquisitions purchase accounting, including inventory step-up  303  153  226  1,067  1,749 
    Resolution of foreign non-income tax contingencies  -  (6,211) -  -  (6,211)
    Adjusted EBITDA $477,013  561,153  509,573  401,066  1,948,805 
               
    Net Debt less short-term investments to adjusted EBITDA         0.9 
    (1) Includes $8,417 of accelerated depreciation in Q4 YTD 2021.          
               
    Reconciliation of Net Sales to Net Sales on a Constant Exchange Rate and on Constant Shipping Days         
    (Amounts in thousands)          
      Three Months Ended Twelve Months Ended  
      December 31, 2021 December 31, 2020 December 31, 2021 December 31, 2020  
    Net sales $2,760,737  2,641,764  11,200,613  9,552,197   
    Adjustment to net sales on constant shipping days  173,206  -  41,841  -   
    Adjustment to net sales on a constant exchange rate  20,737  -  (160,015) -   
    Net sales on a constant exchange rate and constant shipping days $2,954,680  2,641,764  11,082,439  9,552,197   
               
               
    Reconciliation of Segment Net Sales to Segment Net Sales on a Constant Exchange Rate and on Constant Shipping Days         
    (Amounts in thousands)          
      Three Months Ended      
    Global Ceramic December 31, 2021 December 31, 2020      
    Net sales $949,501  919,668       
    Adjustment to segment net sales on constant shipping days  54,209  -       
    Adjustment to segment net sales on a constant exchange rate  5,951  -       
    Segment net sales on a constant exchange rate and constant shipping days $1,009,661  919,668       
               
               
    Reconciliation of Segment Net Sales to Segment Net Sales on Constant Shipping Days           
    (Amounts in thousands)          
      Three Months Ended      
    Flooring NA December 31, 2021 December 31, 2020      
    Net sales $1,015,513  963,365       
    Adjustment to segment net sales on constant shipping days  65,517  -       
    Segment net sales on constant shipping days $1,081,030  963,365       
               
               
    Reconciliation of Segment Net Sales to Segment Net Sales on a Constant Exchange Rate and on Constant Shipping Days        
    (Amounts in thousands)          
      Three Months Ended      
    Flooring ROW December 31, 2021 December 31, 2020      
    Net sales $795,723  758,731       
    Adjustment to segment net sales on constant shipping days  53,481  -       
    Adjustment to segment net sales on a constant exchange rate  14,786  -       
    Segment net sales on a constant exchange rate and constant shipping days $863,990  758,731       
               
               
    Reconciliation of Gross Profit to Adjusted Gross Profit          
    (Amounts in thousands)          
      Three Months Ended      
      December 31, 2021 December 31, 2020      
    Gross Profit $737,443  738,084       
    Adjustments to gross profit:          
    Restructuring, acquisition and integration-related and other costs  2,363  22,789       
    Acquisitions purchase accounting, including inventory step-up  1,067  -       
    Adjusted gross profit $740,873  760,873       
               
               
    Reconciliation of Selling, General and Administrative Expenses to Adjusted Selling, General and Administrative Expenses        
    (Amounts in thousands)          
      Three Months Ended      
      December 31, 2021 December 31, 2020      
    Selling, general and administrative expenses $484,345  455,351       
    Adjustments to selling, general and administrative expenses:          
    Restructuring, acquisition and integration-related and other costs  (2,238) 394       
    Adjusted selling, general and administrative expenses $482,107  455,745       
              
               
    Reconciliation of Operating Income to Adjusted Operating Income          
    (Amounts in thousands)          
      Three Months Ended Twelve Months Ended  
      December 31, 2021 December 31, 2020 December 31, 2021 December 31, 2020  
    Operating income $253,098  282,733  1,335,011  636,002   
    Adjustments to operating income:          
    Restructuring, acquisition and integration-related and other costs  4,601  22,395  23,637  163,479   
    Acquisitions purchase accounting, including inventory step-up  1,067  -  1,749  -   
    Adjusted operating income $258,766  305,128  1,360,397  799,481   
               
               
    Reconciliation of Segment Operating Income to Adjusted Segment Operating Income          
    (Amounts in thousands)          
      Three Months Ended      
    Global Ceramic December 31, 2021 December 31, 2020      
    Operating income $60,000  79,565       
    Adjustments to segment operating income:          
    Restructuring, acquisition and integration-related and other costs  416  8,164       
    Adjusted segment operating income $60,416  87,729       
               
               
    Reconciliation of Segment Operating Income to Adjusted Segment Operating Income          
    (Amounts in thousands)          
      Three Months Ended      
    Flooring NA  December 31, 2021 December 31, 2020      
    Operating income $91,711  82,407       
    Adjustments to segment operating income:          
    Restructuring, acquisition and integration-related and other costs  1,146  8,651       
    Adjusted segment operating income $92,857  91,058       
               
               
    Reconciliation of Segment Operating Income to Adjusted Segment Operating Income           
    (Amounts in thousands)          
      Three Months Ended      
    Flooring ROW  December 31, 2021 December 31, 2020      
    Operating income $114,339  132,505       
    Adjustments to segment operating income:          
    Restructuring, acquisition and integration-related and other costs  2,022  5,496       
    Acquisitions purchase accounting, including inventory step-up  1,067  -       
    Adjusted segment operating income $117,428  138,001       
               
               
    Reconciliation of Segment Operating (Loss) to Adjusted Segment Operating (Loss)          
    (Amounts in thousands)          
      Three Months Ended      
    Corporate and intersegment eliminations December 31, 2021 December 31, 2020      
    Operating (loss) $(12,952) (11,744)      
    Adjustments to segment operating (loss):          
    Restructuring, acquisition and integration-related and other costs  1,018  84       
    Adjusted segment operating (loss) $(11,934) (11,660)      
               
               
    Reconciliation of Earnings Including Noncontrolling Interests Before Income Taxes to Adjusted Earnings Including Noncontrolling Interests Before Income Taxes    
    (Amounts in thousands)          
      Three Months Ended      
      December 31, 2021 December 31, 2020      
    Earnings before income taxes $239,789  273,578       
    Net earnings attributable to noncontrolling interests  (11) (176)      
    Adjustments to earnings including noncontrolling interests before income taxes:          
    Restructuring, acquisition and integration-related and other costs  4,558  22,382       
    Acquisitions purchase accounting, including inventory step-up  1,067  -       
    Adjusted earnings including noncontrolling interests before income taxes $245,403  295,784       
               
               
    Reconciliation of Income Tax Expense to Adjusted Income Tax Expense          
    (Amounts in thousands)          
      Three Months Ended      
      December 31, 2021 December 31, 2020      
    Income tax expense $50,689  25,180       
    One-time tax planning election  (4,568) -       
    Income tax effect of adjusting items  309  18,596       
    Adjusted income tax expense $46,430  43,776       
               
    Adjusted income tax rate  18.9% 14.8%      
               
    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: James Brunk, Chief Financial Officer (706) 624-2239 


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