Focused Execution Continues to Deliver Results for Masco in the First Quarter 2015
April 28 2015 - 7:00AM
Business Wire
Key Highlights
- Sales increased 3 percent to $2 billion
and increased 7 percent excluding the effects of foreign currency
translation
- North American sales increased 5
percent; International sales increased 10 percent in local
currency
- Adjusted operating profit increased 15
percent to $181 million
- Adjusted EPS increased 43 percent to
$.20 per common share
Masco Corporation (NYSE: MAS), one of the world’s leading
manufacturers of branded building products, reported net sales and
operating profit growth in the first quarter of 2015 with all
segments reporting increased sales in local currency. Adjusted
operating profit margin rose to 9 percent, reflecting the Company’s
focused execution and commitment to cost control.
“The momentum we built over the past several years carried into
the first quarter as we realized top- and bottom- line growth as
well as margin expansion. Our customer-focused innovation and
leading brands drove consumer demand across the segments,” said
Masco’s President and CEO Keith Allman. “In local currency, both
Delta Faucet and Hansgrohe achieved their highest sales quarters
ever. Our focus on the pro painter and new products drove sales in
the Decorative Architectural segment. The Other Specialty segment’s
ongoing commitment to innovation led to strengthened results. The
Installation segment continues to perform well, benefiting from
strategic diversification into commercial construction and a
recovering housing environment. In the Cabinets and Related
Products segment, our efforts to improve execution are paying off
as we increased sales to home centers and builders while improving
profitability.”
2015 First Quarter
Commentary
- Net sales from continuing operations
increased 3 percent to $2 billion. North American sales increased 5
percent and international sales decreased 8 percent in U.S. dollars
but increased 10 percent in local currency
- Compared to first quarter 2014, results
for key financial measures, as adjusted for certain items
(see Exhibit A) and with a normalized tax rate of 36 percent, were
as follows:
- Gross margins improved to 28.2 percent
compared to 28 percent
- Operating margins improved to 9 percent
compared to 8 percent
- Income from continuing operations was
$.20 per common share compared to $.14 per common share
- Income from continuing operations,
as reported, was $.18 per common share
- Liquidity at the end of the first
quarter was approximately $1.8 billion
- Approximately 4 million shares were
repurchased in the first quarter
2015 First Quarter Operating Segment
Highlights
- Plumbing Products’ net sales decreased
1 percent, but increased 8 percent excluding the effect of foreign
currency translation, fueled by continued strength in the wholesale
channel
- Decorative Architectural Products’ net
sales increased 2 percent driven by the pro paint initiative and
builders’ hardware program wins
- Cabinets and Related Products’ net
sales increased 5 percent, driven by continued growth with builders
as well as KraftMaid Cabinetry’s sales growth with home centers and
dealers
- Installation and Other Services’ net
sales increased 7 percent with growth across all channels
- Other Specialty Products’ net sales
increased 7 percent, led by a strong performance across all
channels and geographies
Outlook
“We are pleased with our solid start to the year. Our businesses
are performing well and executing as planned,” continued Mr.
Allman. “Our repair and remodel business is growing, with
increasing demand for our products across all price points. We
remain focused on driving shareholder value and returning cash to
shareholders, as evidenced by approximately $135 million we
returned to shareholders in the first quarter through dividends and
share repurchases. Our outlook for the year remains positive as we
anticipate increasing demand for our market-leading products and
services.”
About Masco
Headquartered in Taylor, Michigan, Masco Corporation is one of
the world’s leading manufacturers of branded building products, as
well as a leading provider of services that include the
installation of insulation and other building products.
The 2015 first quarter supplemental material, including a
presentation in PDF format, is available on the Company’s website
at www.masco.com.
Conference Call Details
A conference call regarding items contained in this release is
scheduled for Tuesday, April 28, 2015 at 8:00 a.m. ET. Participants
in the call are asked to register five to ten minutes prior to the
scheduled start time by dialing (855) 226-2726 (855-22MASCO) and
from outside the U.S. at (706) 679-3614. Please use the conference
identification number 15309385. The conference call will be webcast
simultaneously and in its entirety through the Company’s website.
Shareholders, media representatives and others interested in Masco
may participate in the webcast by registering through the Investor
Relations section on the Company’s website.
A replay of the call will be available on Masco’s website or by
phone by dialing (855) 859-2056 and from outside the U.S. at (404)
537-3406. Please use the conference identification number 15309385.
The telephone replay will be available approximately two hours
after the end of the call and continue through May 23, 2015.
Safe Harbor Statement
Statements contained in this press release that reflect our
views about our future performance constitute “forward-looking
statements” under the Private Securities Litigation Reform Act of
1995. Forward-looking statements can be identified by words such as
“believe,” “anticipate,” “appear,” “may,” “will,” “should,”
“intend,” “plan,” “estimate,” “expect,” “assume,” “seek,”
“forecast,” and similar references to future periods. These views
involve risks and uncertainties that are difficult to predict and,
accordingly, our actual results may differ materially from the
results discussed in our forward-looking statements. We caution you
against relying on any of these forward-looking statements. Our
future performance may be affected by our reliance on new home
construction and home improvement, our reliance on key customers,
the cost and availability of raw materials, uncertainty in the
international economy, shifts in consumer preferences and
purchasing practices, our ability to improve our underperforming
businesses, our ability to maintain our competitive position in our
industries, risks associated with the proposed spin-off of our
Services Business, our ability to realize the expected benefits of
the spin-off, the timing and terms of our share repurchase program,
and our ability to reduce corporate expense and simplify our
organizational structure. We discuss many of the risks we face in
Item 1A, “Risk Factors” in our most recent Annual Report on Form
10-K, as well as in our Quarterly Reports on Form 10-Q and in other
filings we make with the Securities and Exchange Commission. Our
forward-looking statements in this press release speak only as of
the date of this press release. Factors or events that could cause
our actual results to differ may emerge from time to time, and it
is not possible for us to predict all of them. Unless required by
law, we undertake no obligation to update publicly any
forward-looking statements as a result of new information, future
events or otherwise.
The Company believes that the non-GAAP performance measures and
ratios that are contained herein, used in managing the business,
may provide users of this financial information with additional
meaningful comparisons between current results and results in prior
periods. Non-GAAP performance measures and ratios should be viewed
in addition to, and not as an alternative for, the Company's
reported results under accounting principles generally accepted in
the United States. Additional information about the Company is
contained in the Company's filings with the Securities and Exchange
Commission and is available on Masco's website at
www.masco.com.
Masco CorporationInvestor
ContactIrene TasiDirector – Investor
Relations313.792.5500irene_tasi@mascohq.com
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