Masco Outperforms in the Second Quarter 2015
July 28 2015 - 7:00AM
Business Wire
Key Highlights
- Sales increased 3 percent to $1.9
billion and increased 7 percent excluding the effects of foreign
currency translation
- North American sales increased 7
percent; International sales increased 5 percent in local
currency
- Adjusted operating profit increased 22
percent to $280 million
- Adjusted EPS increased 36 percent to
$.38 per common share
- Board announces intent to increase
annual dividend by $0.02 per share to $0.38 beginning in the fourth
quarter
- Tax free spin-off of TopBuild Corp.
completed on June 30, 2015
- Masco received a $200 million cash
distribution from TopBuild Corp. on June 30, 2015
Masco Corporation (NYSE: MAS), one of the world’s leading
manufacturers of branded home improvement and building products,
reported net sales and operating profit growth in the second
quarter of 2015. All segments contributed to a 14.5 percent
adjusted operating profit margin, representing a 22 percent
increase over prior year.
“Continued growth momentum, solid execution, and the timing of
paint promotions enabled us to achieve earnings above our
expectations for the quarter,” said Masco’s President and CEO Keith
Allman. “Importantly, our Cabinets and Related Products segment
accelerated the pace of its turnaround, resulting in better than
expected top and bottom line results for that segment. In addition
to our strong sales and profit growth, we returned nearly $270
million to shareholders through dividends and share repurchases in
the first half of 2015.”
2015 Second Quarter
Commentary
- Net sales from continuing operations
increased 3 percent to $1.9 billion. North American sales increased
7 percent and international sales decreased 10 percent in U.S.
dollars but increased 5 percent in local currency
- Compared to second 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 33 percent
compared to 30.7 percent
- Operating margins improved to 14.5
percent compared to 12.2 percent
- Income from continuing operations was
$.38 per common share compared to $.28 per common share
- Income from continuing operations,
as reported, was $.31 per common share
- Liquidity at the end of the second
quarter was approximately $1.5 billion
- Approximately 3.8 million shares were
repurchased in the second quarter
2015 Second Quarter Operating Segment
Highlights
- Plumbing Products’ net sales were flat,
but increased 7 percent excluding the effects of foreign currency
translation, fueled by ongoing strength in the wholesale and retail
channels
- Decorative Architectural Products’ net
sales increased 4 percent, driven by new products and the pro paint
initiative
- Cabinets and Related Products’ net
sales increased 6 percent, driven by KraftMaid® Cabinetry’s sales
growth with home centers and dealers
- Other Specialty Products’ net sales
increased 8 percent, led by Milgard Windows’ strong performance
across all channels and geographies
Outlook
“Masco has delivered a strong first half of the year and we are
proud of our focus and execution,” said Mr. Allman. “With the
completion of the spin-off of TopBuild Corp., we begin a new
chapter in Masco’s history focused on driving shareholder value
through our portfolio of industry-leading branded building
products, operational excellence and disciplined capital
allocation. Our Cabinetry business has returned to profitability
and we expect the momentum it has built over the first half of the
year to continue. For the balance of 2015, we believe the
underlying demand for our market-leading products will increase and
that the repair and remodeling environment will continue to
improve. We believe we are positioned to capitalize on these
opportunities. Reflecting confidence in Masco’s future outlook, our
Board of Directors intends to increase our annual dividend by $0.02
per share to $0.38 beginning with the quarterly dividend to be paid
in the fourth quarter of 2015.”
About Masco
Headquartered in Taylor, Mich., Masco Corporation is a global
leader in the design, manufacture and distribution of branded home
improvement and building products. Our portfolio of
industry-leading brands includes Behr® paint; Delta® and Hansgrohe®
faucets, bath and shower fixtures; KraftMaid® and Merillat®
cabinets; Milgard® windows and doors; and HotSpring® spas. We
leverage our powerful brands across product categories, sales
channels and geographies to create value for our customers and
shareholders. For more information about Masco Corporation, visit
masco.com.
The 2015 second 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, July 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 74579395. 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 74579395.
The telephone replay will be available approximately two hours
after the end of the call and continue through August 28, 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. Our views
about future performance 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, 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. The 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.
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version on businesswire.com: http://www.businesswire.com/news/home/20150728005240/en/
Masco CorporationInvestor
ContactIrene TasiDirector – Investor
Relations313.792.5500irene_tasi@mascohq.com
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