Masco’s Positive Momentum Continues in the Third Quarter
October 27 2015 - 7:00AM
Business Wire
Key Highlights
- Sales increased 4 percent excluding the
effects of foreign currency translation
- North American sales increased 3
percent; International sales increased 4 percent in local
currency
- Adjusted operating profit increased 16
percent to $257 million
- Adjusted operating margins increased
190 bps to 14 percent
- Adjusted EPS increased 26 percent to
$.34 per common share
Masco Corporation (NYSE: MAS), one of the world’s leading
manufacturers of branded home improvement and building products,
reported operating profit growth and flat net sales in the third
quarter of 2015. Adjusted operating margins expanded to 14 percent,
representing a 190 basis point increase over prior year.
“We are pleased with our third quarter financial performance and
operating results,” said Masco’s President and CEO Keith Allman.
“Our innovative products and programs, increased investment in our
brands and consistent execution of our strategies drove our strong
earnings performance. Furthermore, we reaffirmed our commitment to
disciplined capital allocation by returning over $230 million to
shareholders through dividends and share repurchases in the third
quarter of 2015.”
2015 Third Quarter
Commentary
- Net sales from continuing operations
were flat at $1.8 billion. North American sales increased 3 percent
and international sales decreased 9 percent in U.S. dollars but
increased 4 percent in local currency
- Compared to third 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 31.9 percent
compared to 30.0 percent
- Operating margins improved to 14
percent compared to 12.1 percent
- Income from continuing operations was
$.34 per common share compared to $.27 per common share
- Income from continuing operations,
as reported, was $.32 per common share
- Liquidity at the end of the third
quarter was approximately $1.5 billion
- Approximately 7.6 million shares were
repurchased in the third quarter
2015 Third Quarter Operating Segment
Highlights
- Plumbing Products’ net sales were flat,
but increased 6 percent excluding the effects of foreign currency
translation, fueled by continued strength in the wholesale and
retail channels as well as international markets
- Decorative Architectural Products’ net
sales increased 1 percent, driven by pro paint sales and newly
introduced products and programs, and partially offset by the
timing and amount of paint promotions
- Cabinets and Related Products’ net
sales decreased 5 percent, driven by the deliberate exit of low
margin builder business, and partially offset by KraftMaid®
cabinetry’s sales growth with home centers and dealers
- Other Specialty Products’ net sales
increased 8 percent, led by Milgard’s strong performance across all
channels and price points
Outlook
“As we move into the last quarter of the year, we believe we
will continue to see steady demand for our market-leading products
as both repair and remodel demand and new home construction
continue to improve,” said Mr. Allman. “We are confident in our
ability to execute against this macro-economic backdrop by
remaining focused on driving shareholder value through our
industry-leading branded building products, operational excellence
and disciplined capital allocation.”
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 third 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, October 27, 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 52951847. 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 52951847.
The telephone replay will be available approximately two hours
after the end of the call and continue through November 27,
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/20151027005276/en/
Masco CorporationInvestor
ContactIrene TasiDirector – Investor
Relations313.792.5500irene_tasi@mascohq.com
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