x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 52-1604305 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
160 S. Industrial Blvd., Calhoun, Georgia | 30701 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer | x | Accelerated filer | ¨ | |
Non-accelerated filer | ¨ (Do not check if a smaller reporting company) | Smaller reporting company | ¨ |
Page No | ||
Part I. | ||
Item 1. | ||
Condensed Consolidated Balance Sheets as of March 30, 2013 and December 31, 2012 | ||
Condensed Consolidated Statements of Operations for the three months ended March 30, 2013 and March 31, 2012 | ||
Condensed Consolidated Statements of Comprehensive Income (Loss) for the three months ended March 30, 2013 and March 31, 2012 | ||
Condensed Consolidated Statements of Cash Flows for the three months ended March 30, 2013 and March 31, 2012 | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Part II. | ||
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 5. | ||
Item 6. |
March 30, 2013 | December 31, 2012 | |||||
ASSETS | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 1,120,167 | 477,672 | |||
Receivables, net | 825,659 | 679,473 | ||||
Inventories | 1,230,250 | 1,133,736 | ||||
Prepaid expenses | 134,944 | 138,117 | ||||
Deferred income taxes | 113,519 | 111,585 | ||||
Other current assets | 22,067 | 9,463 | ||||
Total current assets | 3,446,606 | 2,550,046 | ||||
Property, plant and equipment, net | 1,729,916 | 1,692,852 | ||||
Goodwill | 1,394,062 | 1,385,771 | ||||
Tradenames | 464,271 | 455,503 | ||||
Other intangible assets subject to amortization, net | 105,085 | 98,296 | ||||
Deferred income taxes and other non-current assets | 121,905 | 121,216 | ||||
$ | 7,261,845 | 6,303,684 |
March 30, 2013 | December 31, 2012 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
Current liabilities: | ||||||
Current portion of long-term debt | $ | 53,496 | 55,213 | |||
Accounts payable and accrued expenses | 824,135 | 773,436 | ||||
Total current liabilities | 877,631 | 828,649 | ||||
Deferred income taxes | 319,290 | 329,810 | ||||
Long-term debt, less current portion | 2,253,020 | 1,327,729 | ||||
Other long-term liabilities | 87,320 | 97,879 | ||||
Total liabilities | 3,537,261 | 2,584,067 | ||||
Commitments and contingencies (Notes 7 and 13) | ||||||
Stockholders’ equity: | ||||||
Preferred stock, $.01 par value; 60 shares authorized; no shares issued | — | — | ||||
Common stock, $.01 par value; 150,000 shares authorized; 80,638 and 80,185 shares issued in 2013 and 2012, respectively | 806 | 802 | ||||
Additional paid-in capital | 1,308,040 | 1,277,521 | ||||
Retained earnings | 2,655,518 | 2,605,023 | ||||
Accumulated other comprehensive income, net | 82,242 | 159,733 | ||||
4,046,606 | 4,043,079 | |||||
Less treasury stock at cost; 11,029 and 11,032 shares in 2013 and 2012, respectively | 323,388 | 323,462 | ||||
Total Mohawk Industries, Inc. stockholders' equity | 3,723,218 | 3,719,617 | ||||
Noncontrolling interest | 1,366 | — | ||||
Total stockholders' equity | 3,724,584 | 3,719,617 | ||||
$ | 7,261,845 | 6,303,684 |
Three Months Ended | ||||||
March 30, 2013 | March 31, 2012 | |||||
Net sales | $ | 1,486,815 | 1,409,035 | |||
Cost of sales | 1,109,749 | 1,049,609 | ||||
Gross profit | 377,066 | 359,426 | ||||
Selling, general and administrative expenses | 290,224 | 287,450 | ||||
Operating income | 86,842 | 71,976 | ||||
Interest expense | 19,156 | 22,498 | ||||
Other expense (income) | 6,387 | (1,825 | ) | |||
Earnings before income taxes | 61,299 | 51,303 | ||||
Income tax expense | 10,732 | 10,291 | ||||
Net earnings | 50,567 | 41,012 | ||||
Less: Net earnings attributable to noncontrolling interest | 72 | 635 | ||||
Net earnings attributable to Mohawk Industries, Inc. | $ | 50,495 | 40,377 | |||
Basic earnings per share attributable to Mohawk Industries, Inc. | $ | 0.73 | 0.59 | |||
Weighted-average common shares outstanding—basic | 69,375 | 68,862 | ||||
Diluted earnings per share attributable to Mohawk Industries, Inc. | $ | 0.72 | 0.58 | |||
Weighted-average common shares outstanding—diluted | 69,897 | 69,141 |
Three Months Ended | ||||||
March 30, 2013 | March 31, 2012 | |||||
Net earnings | $ | 50,567 | 41,012 | |||
Other comprehensive (loss) income: | ||||||
Foreign currency translation adjustments | (77,706 | ) | 54,961 | |||
Pension prior service cost and actuarial gain | 215 | 17 | ||||
Other comprehensive (loss) income | (77,491 | ) | 54,978 | |||
Comprehensive (loss) income | (26,924 | ) | 95,990 | |||
Less: comprehensive income attributable to the noncontrolling interest | 72 | 635 | ||||
Comprehensive (loss) income attributable to Mohawk Industries, Inc. | $ | (26,996 | ) | 95,355 |
Three Months Ended | ||||||
March 30, 2013 | March 31, 2012 | |||||
Cash flows from operating activities: | ||||||
Net earnings | $ | 50,567 | 41,012 | |||
Adjustments to reconcile net earnings to net cash used in operating activities: | ||||||
Restructuring | 8,222 | — | ||||
Depreciation and amortization | 60,349 | 73,286 | ||||
Deferred income taxes | (5,985 | ) | (4,978 | ) | ||
Loss on disposal of property, plant and equipment | 51 | 419 | ||||
Stock-based compensation expense | 5,504 | 5,571 | ||||
Changes in operating assets and liabilities, net of effects of acquisitions: | ||||||
Receivables, net | (120,814 | ) | (91,485 | ) | ||
Tax deposits | — | (31,820 | ) | |||
Inventories | (50,134 | ) | (46,331 | ) | ||
Accounts payable and accrued expenses | 15,568 | 13,814 | ||||
Other assets and prepaid expenses | 11,115 | 1,565 | ||||
Other liabilities | (13,387 | ) | (5,523 | ) | ||
Net cash used in operating activities | (38,944 | ) | (44,470 | ) | ||
Cash flows from investing activities: | ||||||
Additions to property, plant and equipment | (63,282 | ) | (43,251 | ) | ||
Acquisitions, net of cash acquired | (147,769 | ) | — | |||
Net cash used in investing activities | (211,051 | ) | (43,251 | ) | ||
Cash flows from financing activities: | ||||||
Payments on Senior Credit Facility | (537,409 | ) | (329,800 | ) | ||
Proceeds from Senior Credit Facility | 842,634 | 443,500 | ||||
Proceeds from 3.85% Senior Notes | 600,000 | — | ||||
Net change in asset securitization borrowings | 20,000 | — | ||||
Payments on other debt | (1,630 | ) | (584 | ) | ||
Debt issuance costs | (5,170 | ) | (1,018 | ) | ||
Purchase of non-controlling interest | — | (35,000 | ) | |||
Distribution to non-controlling interest | — | (423 | ) | |||
Change in outstanding checks in excess of cash | (8,069 | ) | (10,255 | ) | ||
Proceeds from stock transactions | 27,619 | 5,539 | ||||
Net cash provided by financing activities | 937,975 | 71,959 | ||||
Effect of exchange rate changes on cash and cash equivalents | (45,485 | ) | 8,592 | |||
Net change in cash and cash equivalents | 642,495 | (7,170 | ) | |||
Cash and cash equivalents, beginning of period | 477,672 | 311,945 | ||||
Cash and cash equivalents, end of period | $ | 1,120,167 | 304,775 |
1. | Interim reporting |
2. | Receivables, net |
March 30, 2013 | December 31, 2012 | |||||
Customers, trade | $ | 843,851 | 691,553 | |||
Other | 23,765 | 25,793 | ||||
867,616 | 717,346 | |||||
Less allowance for discounts, returns, claims and doubtful accounts | 41,957 | 37,873 | ||||
Receivables, net | $ | 825,659 | 679,473 |
3. | Acquisitions |
March 30, 2013 | December 31, 2012 | |||||
Finished goods | $ | 777,825 | 695,606 | |||
Work in process | 108,084 | 103,685 | ||||
Raw materials | 344,341 | 334,445 | ||||
Total inventories | $ | 1,230,250 | 1,133,736 |
Mohawk | Dal-Tile | Unilin | Total | |||||||||
Balance as of December 31, 2012 | ||||||||||||
Goodwill | $ | 199,132 | 1,186,913 | 1,327,151 | 2,713,196 | |||||||
Accumulated impairment losses | (199,132 | ) | (531,930 | ) | (596,363 | ) | (1,327,425 | ) | ||||
$ | — | 654,983 | 730,788 | 1,385,771 | ||||||||
Goodwill acquired during the period | $ | — | — | 24,501 | 24,501 | |||||||
Currency translation during the period | $ | — | — | (16,210 | ) | (16,210 | ) | |||||
Balance as of March 30, 2013 | ||||||||||||
Goodwill | $ | 199,132 | 1,186,913 | 1,335,442 | 2,721,487 | |||||||
Accumulated impairment losses | (199,132 | ) | (531,930 | ) | (596,363 | ) | (1,327,425 | ) | ||||
$ | — | 654,983 | 739,079 | 1,394,062 |
Indefinite life assets not subject to amortization: | Tradenames | ||
Balance as of December 31, 2012 | $ | 455,503 | |
Intangible assets recognized during the period | 16,835 | ||
Currency translation during the period | (8,067 | ) | |
Balance as of March 30, 2013 | $ | 464,271 |
Intangible assets subject to amortization: | Customer relationships | Patents | Other | Total | ||||||||
Balance as of December 31, 2012 | $ | 26,210 | 71,031 | 1,055 | 98,296 | |||||||
Intangible assets acquired during the period | — | 15,188 | — | 15,188 | ||||||||
Amortization during the period | (1,219 | ) | (4,726 | ) | (29 | ) | (5,974 | ) | ||||
Currency translation during the period | — | (2,305 | ) | (120 | ) | (2,425 | ) | |||||
Balance as of March 30, 2013 | $ | 24,991 | 79,188 | 906 | 105,085 |
Three Months Ended | ||||||
March 30, 2013 | March 31, 2012 | |||||
Amortization expense | $ | 5,974 | 16,261 |
March 30, 2013 | December 31, 2012 | |||||
Outstanding checks in excess of cash | $ | 17,411 | 25,480 | |||
Accounts payable, trade | 459,397 | 387,871 | ||||
Accrued expenses | 176,045 | 180,039 | ||||
Product warranties | 35,483 | 32,930 | ||||
Accrued interest | 16,553 | 26,843 | ||||
Deferred tax liability | 10,377 | 6,309 | ||||
Income taxes payable | 10,033 | 2,074 | ||||
Accrued compensation and benefits | 98,836 | 111,890 | ||||
Total accounts payable and accrued expenses | $ | 824,135 | 773,436 |
Three Months Ended | ||||||
March 30, 2013 | March 31, 2012 | |||||
Balance at beginning of period | $ | 32,930 | 30,144 | |||
Warranty claims paid during the period | (13,301 | ) | (13,920 | ) | ||
Warranty expense during the period | 15,854 | 16,456 | ||||
Balance at end of period | $ | 35,483 | 32,680 |
Foreign currency translation adjustments | Pensions (1) | Total | |||||||
Balance as of December 31, 2012 | $ | 160,661 | (928 | ) | 159,733 | ||||
Current period other comprehensive income (loss) before reclassifications | (77,706 | ) | 215 | (77,491 | ) | ||||
Amounts reclassified from accumulated other comprehensive income (loss) | — | — | — | ||||||
Balance as of March 30, 2013 | $ | 82,955 | (713 | ) | 82,242 |
Three Months Ended | ||||||
March 30, 2013 | March 31, 2012 | |||||
Foreign currency (gains) losses, net | $ | 3,799 | (5,650 | ) | ||
All other, net | 2,588 | 3,825 | ||||
Total other expense (income) | $ | 6,387 | (1,825 | ) |
Three Months Ended | ||||||
March 30, 2013 | March 31, 2012 | |||||
Net earnings available to common stockholders | $ | 50,495 | 40,377 | |||
Weighted-average common shares outstanding-basic and diluted: | ||||||
Weighted-average common shares outstanding—basic | 69,375 | 68,862 | ||||
Add weighted-average dilutive potential common shares—options and RSUs to purchase common shares, net | 522 | 279 | ||||
Weighted-average common shares outstanding-diluted | 69,897 | 69,141 | ||||
Basic earnings per share attributable to Mohawk Industries, Inc. | $ | 0.73 | 0.59 | |||
Diluted earnings per share attributable to Mohawk Industries, Inc. | $ | 0.72 | 0.58 |
Three Months Ended | ||||||
March 30, 2013 | March 31, 2012 | |||||
Net sales: | ||||||
Mohawk | $ | 695,334 | 699,880 | |||
Dal-Tile | 411,881 | 392,925 | ||||
Unilin | 404,475 | 337,424 | ||||
Intersegment sales | (24,875 | ) | (21,194 | ) | ||
$ | 1,486,815 | 1,409,035 | ||||
Operating income (loss): | ||||||
Mohawk | $ | 25,238 | 25,282 | |||
Dal-Tile | 29,976 | 26,028 | ||||
Unilin | 38,693 | 27,146 | ||||
Corporate and intersegment eliminations | (7,065 | ) | (6,480 | ) | ||
$ | 86,842 | 71,976 |
March 30, 2013 | December 31, 2012 | |||||
Assets: | ||||||
Mohawk | $ | 1,802,241 | 1,721,214 | |||
Dal-Tile | 1,795,828 | 1,731,258 | ||||
Unilin | 2,469,264 | 2,672,389 | ||||
Corporate and intersegment eliminations | 1,194,512 | 178,823 | ||||
$ | 7,261,845 | 6,303,684 |
Lease impairments | Asset write-downs | Severance | Other restructuring costs | Total | |||||||||||
Balance as of December 31, 2012 | $ | 7,457 | — | 2,898 | — | 10,355 | |||||||||
Provision - Mohawk Segment | — | — | 5,892 | 326 | 6,218 | ||||||||||
Provision - Dal-Tile Segment | — | 37 | — | 426 | 463 | ||||||||||
Provision - Unilin Segment | — | 1,456 | 85 | 1,541 | |||||||||||
Cash payments | (703 | ) | — | (4,145 | ) | (837 | ) | (5,685 | ) | ||||||
Non-cash items | (37 | ) | — | (37 | ) | ||||||||||
Balance as of March 30, 2013 | $ | 6,754 | — | 6,101 | — | 12,855 |
March 30, 2013 | December 31, 2012 | |||||||||||
Fair Value | Carrying Value | Fair Value | Carrying Value | |||||||||
3.85% senior notes, payable January 31, 2023; interest payable semiannually | $ | 610,800 | 600,000 | — | — | |||||||
6.125% notes, payable January 15, 2016; interest payable semiannually | 1,004,400 | 900,000 | 1,011,600 | 900,000 | ||||||||
Five-year senior secured credit facility, due July 8, 2016 | 459,100 | 459,100 | 153,875 | 153,875 | ||||||||
Securitization facility | 300,000 | 300,000 | 280,000 | 280,000 | ||||||||
Industrial revenue bonds, capital leases and other | 47,416 | 47,416 | 49,067 | 49,067 | ||||||||
Total long-term debt | 2,421,716 | 2,306,516 | 1,494,542 | 1,382,942 | ||||||||
Less current portion | 53,496 | 53,496 | 55,213 | 55,213 | ||||||||
Long-term debt, less current portion | $ | 2,368,220 | 2,253,020 | 1,439,329 | 1,327,729 |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
Item 4. | Controls and Procedures |
Item 1. | Legal Proceedings |
Item 1A. | Risk Factors |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Item 3. | Defaults Upon Senior Securities |
Item 4. | Mine Safety Disclosures |
Item 5. | Other Information |
Item 6. | Exhibits |
No. | Description | |
4.1 | Indenture, dated as of January 31, 2013, by and between Mohawk Industries, Inc. and U.S. Bank National Association, as Trustee (Incorporated herein by reference to Exhibit 4.1 of the Company's Current Report on Form 8-K dated January 31, 2013.) | |
4.2 | First Supplemental Indenture, dated as of January 31, 2013, by and between Mohawk Industries, Inc. and U.S. Bank National Association, as Trustee (Incorporated herein by reference to Exhibit 4.2 of the Company's Current Report on Form 8-K dated January 31, 2013.) | |
10.1 | Amendment No. 3 to the Credit Agreement, dated January 28, 2013, by and among Mohawk Industries, Inc. and certain of its subsidiaries, as Borrowers, Bank of America, N.A., as Administrative Agent, Swing Line Lender and a L/C Issuer, the other lenders party thereto and the other parties thereto (Incorporated herein by reference to Exhibit 10.2 of the Company's Current Report on Form 8-K dated January 30, 2013.) | |
10.2 | First Amendment to Credit and Security Agreement, dated as of January 22, 2013, by and among Mohawk Factoring, LLC, as borrower, Mohawk Servicing, LLC, as servicer, the lenders from time to time party thereto, the liquidity banks from time to time party thereto, the co-agents from time to time party thereto and SunTrust Bank, as administrative agent (Incorporated herein by reference to Exhibit 10.10 of the Company's Annual Report on Form 10-K dated February 27, 2013.) | |
10.3 | Stock Restriction and Registration Rights Agreement, dated as of April 3, 2013, by and among Mohawk Industries, Inc., LuxELIT S.á r.l., and Finceramica S.p.A. | |
31.1 | Certification Pursuant to Rule 13a-14(a). | |
31.2 | Certification Pursuant to Rule 13a-14(a). | |
32.1 | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
32.2 | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
101.INS | XBRL Instance Document. | |
101.SCH | XBRL Taxonomy Extension Schema Document. | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document. | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document. | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document. | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document. |
MOHAWK INDUSTRIES, INC. | ||||
(Registrant) | ||||
Dated: | May 6, 2013 | By: | /s/ Jeffrey S. Lorberbaum | |
JEFFREY S. LORBERBAUM | ||||
Chairman and Chief Executive Officer | ||||
(principal executive officer) | ||||
Dated: | May 6, 2013 | By: | /s/ Frank H. Boykin | |
FRANK H. BOYKIN | ||||
Chief Financial Officer | ||||
(principal financial officer) |
By: | /s/ Eddy Perrier _______________ Name: Eddy Perrier Title: Attorney |
By: /s/ Frank H. Boykin__________________ Name: Frank H. Boykin | Title: Chief Financial Officer |
1. | P4 Sub L.P. 1 |
2. | Permira IV L.P.2 |
3. | Permira Investments Limited |
4. | P4 Co-Investment L.P. |
5. | Private Equity Partners Fund IV |
6. | Private Equity Partners SpA |
7. | Simon Fiduciaria |
8. | Rosaria Marazzi |
9. | Carolina Marazzi |
10. | Emanuela Marazzi |
1. | I have reviewed this quarterly report on Form 10-Q of Mohawk Industries, Inc.; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: | |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and | |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): | |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and | |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ Jeffrey S. Lorberbaum |
Jeffrey S. Lorberbaum |
Chairman and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Mohawk Industries, Inc.; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: | |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and | |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): | |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and | |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ Frank H. Boykin |
Frank H. Boykin |
Chief Financial Officer |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Jeffrey S. Lorberbaum |
Jeffrey S. Lorberbaum |
Chairman and Chief Executive Officer |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Frank H. Boykin |
Frank H. Boykin |
Chief Financial Officer |
Goodwill and intangible assets (Narrative)(Details) (Details) (USD $)
In Thousands, unless otherwise specified |
Mar. 30, 2013
|
Dec. 31, 2012
|
Jan. 10, 2013
Pergo [Member]
|
---|---|---|---|
Goodwill [Line Items] | |||
Goodwill | $ 1,394,062 | $ 1,385,771 | $ 25,000 |
Commitments, contingencies and other (Restructuring activity) (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | |
---|---|---|
Mar. 30, 2013
|
Mar. 31, 2012
|
|
Restructuring Reserve [Roll Forward] | ||
Beginning balance | $ 10,355 | |
Provision | 8,222 | 0 |
Cash payments | (5,685) | |
Non-cash items | (37) | |
Ending balance | 12,855 | |
Lease Impairments [Member]
|
||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 7,457 | |
Cash payments | (703) | |
Non-cash items | ||
Ending balance | 6,754 | |
Asset Write-Down [Member]
|
||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 0 | |
Cash payments | 0 | |
Non-cash items | (37) | |
Ending balance | 0 | |
Severance [Member]
|
||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 2,898 | |
Cash payments | (4,145) | |
Non-cash items | 0 | |
Ending balance | 6,101 | |
Other Restructuring Costs [Member]
|
||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 0 | |
Cash payments | (837) | |
Non-cash items | ||
Ending balance | 0 | |
Mohawk Segment [Member]
|
||
Restructuring Reserve [Roll Forward] | ||
Provision | 6,218 | |
Mohawk Segment [Member] | Lease Impairments [Member]
|
||
Restructuring Reserve [Roll Forward] | ||
Provision | 0 | |
Mohawk Segment [Member] | Asset Write-Down [Member]
|
||
Restructuring Reserve [Roll Forward] | ||
Provision | 0 | |
Mohawk Segment [Member] | Severance [Member]
|
||
Restructuring Reserve [Roll Forward] | ||
Provision | 5,892 | |
Mohawk Segment [Member] | Other Restructuring Costs [Member]
|
||
Restructuring Reserve [Roll Forward] | ||
Provision | 326 | |
Dal Tile Segment [Member]
|
||
Restructuring Reserve [Roll Forward] | ||
Provision | 463 | |
Dal Tile Segment [Member] | Lease Impairments [Member]
|
||
Restructuring Reserve [Roll Forward] | ||
Provision | 0 | |
Dal Tile Segment [Member] | Asset Write-Down [Member]
|
||
Restructuring Reserve [Roll Forward] | ||
Provision | 37 | |
Dal Tile Segment [Member] | Severance [Member]
|
||
Restructuring Reserve [Roll Forward] | ||
Provision | 0 | |
Dal Tile Segment [Member] | Other Restructuring Costs [Member]
|
||
Restructuring Reserve [Roll Forward] | ||
Provision | 426 | |
Unilin Segment [Member]
|
||
Restructuring Reserve [Roll Forward] | ||
Provision | 1,541 | |
Unilin Segment [Member] | Lease Impairments [Member]
|
||
Restructuring Reserve [Roll Forward] | ||
Provision | 0 | |
Unilin Segment [Member] | Severance [Member]
|
||
Restructuring Reserve [Roll Forward] | ||
Provision | 1,456 | |
Unilin Segment [Member] | Other Restructuring Costs [Member]
|
||
Restructuring Reserve [Roll Forward] | ||
Provision | $ 85 |
Segment reporting (Summary of segment information) (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | ||
---|---|---|---|
Mar. 30, 2013
segment
|
Mar. 31, 2012
|
Dec. 31, 2012
|
|
Segment Reporting Information [Line Items] | |||
Net sales | $ 1,486,815 | $ 1,409,035 | |
Intersegment sales | (24,875) | (21,194) | |
Operating income (loss) | 86,842 | 71,976 | |
Assets | 7,261,845 | 6,303,684 | |
Number of reporting segments | 3 | ||
Mohawk [Member]
|
|||
Segment Reporting Information [Line Items] | |||
Net sales | 695,334 | 699,880 | |
Operating income (loss) | 25,238 | 25,282 | |
Assets | 1,802,241 | 1,721,214 | |
Dal-Tile [Member]
|
|||
Segment Reporting Information [Line Items] | |||
Net sales | 411,881 | 392,925 | |
Operating income (loss) | 29,976 | 26,028 | |
Assets | 1,795,828 | 1,731,258 | |
Unilin [Member]
|
|||
Segment Reporting Information [Line Items] | |||
Net sales | 404,475 | 337,424 | |
Operating income (loss) | 38,693 | 27,146 | |
Assets | 2,469,264 | 2,672,389 | |
Corporate and Intersegment Eliminations [Member]
|
|||
Segment Reporting Information [Line Items] | |||
Operating income (loss) | (7,065) | (6,480) | |
Assets | $ 1,194,512 | $ 178,823 |
Receivables, net (Net components of receivables) (Details) (USD $)
In Thousands, unless otherwise specified |
Mar. 30, 2013
|
Dec. 31, 2012
|
---|---|---|
Receivables [Abstract] | ||
Customers, trade | $ 843,851 | $ 691,553 |
Other | 23,765 | 25,793 |
Receivables, gross | 867,616 | 717,346 |
Less allowance for discounts, returns, claims and doubtful accounts | 41,957 | 37,873 |
Receivables, net | $ 825,659 | $ 679,473 |
Accounts payable and accrued expenses (Tables)
|
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 30, 2013
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of accounts payable and accrued expenses | Accounts payable and accrued expenses are as follows:
|
Debt (Senior Notes) (Details) (USD $)
|
3 Months Ended | 0 Months Ended | 3 Months Ended | 12 Months Ended | 0 Months Ended | 3 Months Ended | ||||
---|---|---|---|---|---|---|---|---|---|---|
Mar. 30, 2013
|
Mar. 31, 2012
|
Jan. 31, 2013
3.85% Senior Notes Due February 1,2023 [Member]
|
Jan. 17, 2006
6.125% Notes, Payable January 15, 2016 [Member]
|
Mar. 31, 2012
6.125% Notes, Payable January 15, 2016 [Member]
|
Dec. 31, 2009
6.125% Notes, Payable January 15, 2016 [Member]
|
Apr. 16, 2012
7.20% Senior Notes, Payable April 15, 2012 [Member]
|
Mar. 30, 2013
7.20% Senior Notes, Payable April 15, 2012 [Member]
|
Mar. 31, 2012
7.20% Senior Notes, Payable April 15, 2012 [Member]
|
Dec. 31, 2002
7.20% Senior Notes, Payable April 15, 2012 [Member]
|
|
Debt Instrument [Line Items] | ||||||||||
Aggregate principal amount of debts | $ 600,000,000 | $ 900,000,000 | $ 400,000,000 | |||||||
Interest rate percentage | 3.85% | 6.125% | 7.20% | 7.20% | ||||||
Payment of financing costs | 5,150,000 | |||||||||
Notes payable, maturity date | Jan. 15, 2016 | Apr. 15, 2012 | ||||||||
Increase in interest rate from rating agency downgrade | 0.25% | |||||||||
Maximum increase in interest rate per agency from rating agency downgrade | 1.00% | |||||||||
Aggregate amount of increase in interest rate from rating agency downgrade | 0.75% | |||||||||
Aggregate amount of decrease in interest rate from rating agency downgrade | 0.50% | |||||||||
Increase in interest expense per quarter for .25% increase in notes per $100,000 of outstanding notes | 19,156,000 | 22,498,000 | 63,000 | |||||||
Incremental increase in outstanding notes | 100,000 | |||||||||
Remaining outstanding senior notes repaid | 63,730,000 | |||||||||
Repurchase price as percentage of principal amount of senior notes | 102.72% | |||||||||
Company repaid principal amount | 336,270,000 | |||||||||
Debt instruments interest accrued | $ 12,106,000 |
Goodwill and intangible assets (Schedule of intangible assets subject to amortization) (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | |
---|---|---|
Mar. 30, 2013
|
Mar. 31, 2012
|
|
Finite-lived Intangible Assets [Roll Forward] | ||
Intangible assets subject to amortization, beginning balance | $ 98,296 | |
Intangible assets recognized during the period | 15,188 | |
Amortization during the period | (5,974) | (16,261) |
Currency translation during the period | (2,425) | |
Intangible assets subject to amortization, ending balance | 105,085 | |
Customer Relationships [Member]
|
||
Finite-lived Intangible Assets [Roll Forward] | ||
Intangible assets subject to amortization, beginning balance | 26,210 | |
Intangible assets recognized during the period | 0 | |
Amortization during the period | (1,219) | |
Currency translation during the period | 0 | |
Intangible assets subject to amortization, ending balance | 24,991 | |
Patents [Member]
|
||
Finite-lived Intangible Assets [Roll Forward] | ||
Intangible assets subject to amortization, beginning balance | 71,031 | |
Intangible assets recognized during the period | 15,188 | |
Amortization during the period | (4,726) | |
Currency translation during the period | (2,305) | |
Intangible assets subject to amortization, ending balance | 79,188 | |
Other [Member]
|
||
Finite-lived Intangible Assets [Roll Forward] | ||
Intangible assets subject to amortization, beginning balance | 1,055 | |
Intangible assets recognized during the period | 0 | |
Amortization during the period | (29) | |
Currency translation during the period | (120) | |
Intangible assets subject to amortization, ending balance | $ 906 |
Fair value (Fair value and carrying value of debt instruments) (Details) (USD $)
In Thousands, unless otherwise specified |
Mar. 30, 2013
|
Dec. 31, 2012
|
Jan. 31, 2013
3.85% Senior Notes Due February 1,2023 [Member]
|
Jan. 17, 2006
6.125% Notes, Payable January 15, 2016; interest payable semiannually [Member]
|
Mar. 30, 2013
Fair Value [Member]
|
Dec. 31, 2012
Fair Value [Member]
|
Mar. 30, 2013
Fair Value [Member]
3.85% Senior Notes Due February 1,2023 [Member]
|
Dec. 31, 2012
Fair Value [Member]
3.85% Senior Notes Due February 1,2023 [Member]
|
Mar. 30, 2013
Fair Value [Member]
6.125% Notes, Payable January 15, 2016; interest payable semiannually [Member]
|
Dec. 31, 2012
Fair Value [Member]
6.125% Notes, Payable January 15, 2016; interest payable semiannually [Member]
|
Mar. 30, 2013
Fair Value [Member]
Five-Year Senior Secured Credit Facility, Due July 8, 2016 [Member]
|
Dec. 31, 2012
Fair Value [Member]
Five-Year Senior Secured Credit Facility, Due July 8, 2016 [Member]
|
Mar. 30, 2013
Carrying Value [Member]
|
Dec. 31, 2012
Carrying Value [Member]
|
Mar. 30, 2013
Carrying Value [Member]
3.85% Senior Notes Due February 1,2023 [Member]
|
Dec. 31, 2012
Carrying Value [Member]
3.85% Senior Notes Due February 1,2023 [Member]
|
Mar. 30, 2013
Carrying Value [Member]
6.125% Notes, Payable January 15, 2016; interest payable semiannually [Member]
|
Dec. 31, 2012
Carrying Value [Member]
6.125% Notes, Payable January 15, 2016; interest payable semiannually [Member]
|
Mar. 30, 2013
Carrying Value [Member]
Five-Year Senior Secured Credit Facility, Due July 8, 2016 [Member]
|
Dec. 31, 2012
Carrying Value [Member]
Five-Year Senior Secured Credit Facility, Due July 8, 2016 [Member]
|
Mar. 30, 2013
Secured Credit Facility [Member]
Fair Value [Member]
|
Dec. 31, 2012
Secured Credit Facility [Member]
Fair Value [Member]
|
Mar. 30, 2013
Secured Credit Facility [Member]
Carrying Value [Member]
|
Dec. 31, 2012
Secured Credit Facility [Member]
Carrying Value [Member]
|
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||||||||||||||||||||
Notes payable | $ 610,800 | $ 0 | $ 1,004,400 | $ 1,011,600 | $ 459,100 | $ 153,875 | $ 600,000 | $ 0 | $ 900,000 | $ 900,000 | $ 459,100 | $ 153,875 | ||||||||||||
Securitization facility | 300,000 | 280,000 | 300,000 | 280,000 | ||||||||||||||||||||
Industrial revenue bonds, capital leases and other | 47,416 | 49,067 | 47,416 | 49,067 | ||||||||||||||||||||
Total long-term debt | 2,421,716 | 1,494,542 | 2,306,516 | 1,382,942 | ||||||||||||||||||||
Less current portion | 53,496 | 55,213 | 53,496 | 55,213 | 53,496 | 55,213 | ||||||||||||||||||
Long-term debt, less current portion | $ 2,368,220 | $ 1,439,329 | $ 2,253,020 | $ 1,327,729 | ||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 3.85% | 6.125% |
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