This favorable adjustment in the estimate is based on sales running about 4.0% to 5.0% above last year while gross profit as a percentage of sales is projected to be in line with last year. Selling, general and administrative expenses is estimated to be at approximately the same dollar level as the fourth quarter of 2000. The normal tax rate of 37% is projected to be reduced by additional tax credits.
A possible net result of these factors is for fourth quarter earnings per share to be between $0.90 and $0.95. These estimates are based on two months results and subject to change based on December's actual results and final year-end adjustments.
During the third and fourth quarters the company benefited from sales improvements in all product areas when compared to the first half of 2001. The company is not certain if the sales improvement is a reaction to postponed orders after September 11th or indicative of economic improvement. Most economists have not forecast improvement until the second half of 2002. Considering the various factors impacting the business at this time and assuming that the economy continues to improve during 2002, then the company expects the earnings per share for the first two quarters of 2002 to be approximately 10% to 15% above 2001 comparable quarters. None of the above information includes the impact of the company’s proposed acquisition of Dal-Tile International. A conference call (telephone 800-603-9255) will be held at 3:00 pm (EST) on Monday, December 10th.