Mohawk Industries, Inc.

Good morning. My name is Simon, and I will be your conference operator today. At this time, I would like to welcome everyone to the Mohawk Industries first quarter 2019 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer period. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. To withdraw your question, please press the pound key. Should anyone need assistance at any time during this conference, please press star, then zero, and an operator will assist you. As a reminder, ladies and gentlemen, this conference is being recorded today, Friday, April 26, 2019. Thank you. I would now like to introduce Mr. Frank Boykin. Mr. Boykin, you may begin your conference.

Thank you, Simon. Good morning, everyone, and welcome to Mohawk Industries' quarterly investor conference call. Today, we'll update you on the company's results for the first quarter of 2019 and provide guidance for the second quarter. I'd like to remind everyone that our press release and statements that we make during this call may include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, which are subject to various risks and uncertainties, including but not limited to those set forth in our press release and our periodic filings with the Security and Exchange Commission. This call may include discussion of non-GAAP numbers. You can refer to our Form 8K and press release in the Investor Information section of our website for a reconciliation of any non-GAAP to GAAP amounts. Before proceeding with the call, we want to express our sympathy to the family of John Swift, Mohawk's CFO from 1984 through 2004, who recently passed away. John was a leader in the transition of Mohawk from a $300 million division of Mohasko through a leveraged buyout, followed by an initial public offering. He helped grow Mohawk into a $5 billion flooring company prior to his retirement in 2004. Moving back to the earnings call, joining us today are Jeff Loeberbaum, Chairman and Chief Executive Officer, Chris Wellborn, President and Chief Operating Officer, and Glenn Landau, who joined Mohawk this month as Executive Vice President and Chief Financial Officer. With that, I'll turn the call over to Jeff for his opening remarks. Jeff?

Thank you, Frank. In the first quarter, our results came in line with the high end of our expectations. We delivered sales of $2.4 billion, up 1% as reported, and up 6% on a constant exchange in days basis. Our adjusted operating income for the period was $207 million, or 8.5% of sales, in a difficult environment which we anticipate improving. The U.S. dollar strengthened significantly versus the prior year, reducing our translated results for the period. During the period, the economies were softer in most of our regions. Housing markets were weaker, and material and energy costs escalated around the world. Uneven demand impacted volume, increasing pressure on pricing and mix as competition increased. To align our inventories with demand, we reduced production rates to manage working capital. In the U.S., flooring retailers reported that after disappointing results in January and February, activity was improving by the end of the quarter. During the first quarter, we raised prices in many of our markets to cover inflation, and each of our businesses are taking specific actions to adapt to the present environment. We're introducing new products to differentiate our offerings and enhance our margins. We've replaced higher cost assets, consolidated operations, enhanced manufacturing processes, and reduced overhead expenses. We will take further actions across the enterprise as we move through the year to grow our sales and improve our margins. While we are managing through the current conditions, we're continuing to strengthen the long-term value of the business. The integration of our 2018 acquisitions in Australia, New Zealand, and Brazil remains on track, and we are further investing to enhance their performance. Our products and geographic expansions continue to ramp up as we increase sales. We will realize the potential of these projects through 2020 and beyond. For more detail on the performance of our segments, I'll turn the call over to Chris.