Masco Delivers Strong Fourth Quarter and Full-Year Results by Executing on Strategic Initiatives
February 09 2016 - 7:00AM
Business Wire
2015 Fourth Quarter Key
Highlights
- Sales for the fourth quarter increased
3 percent to $1.7 billion; sales increased 6 percent excluding the
impact of foreign currency translation
- Adjusted operating profit grew 31
percent to $219 million
- Adjusted operating profit margin for
the quarter increased to 12.8 percent, a 280 basis point
expansion
- Adjusted EPS for the quarter grew 61
percent to $.29 per common share
Masco Corporation (NYSE: MAS), one of the world’s leading
manufacturers of branded home improvement and building products,
reported net sales and adjusted operating profit growth in the
fourth quarter of 2015. Adjusted operating profit margin rose to
12.8 percent, representing a 280 basis point increase over the
prior year.
2015 Fourth Quarter
Commentary
- Compared to fourth quarter 2014, net
sales from continuing operations increased 3 percent to $1.7
billion. In local currency, North American sales increased 6
percent and international sales increased 4 percent
- Compared to fourth 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 31.3 percent
compared to 29.1 percent
- Operating margins improved to 12.8
percent compared to 10.0 percent
- Income from continuing operations was
$.29 per common share compared to $.18 per common share
- Income from continuing operations, as
reported, was $.22 per common share
- Liquidity at the end of the fourth
quarter was approximately $1.7 billion
- 1.8 million shares were repurchased in
the fourth quarter
2015 Fourth Quarter Operating Segment
Highlights
- Plumbing Products’ net sales increased
5 percent (10 percent excluding the impact of foreign currency
translation) driven by growth across the segment
- Decorative Architectural Products’ net
sales decreased 4 percent, primarily due to challenging
year-over-year comparisons driven by the timing of inventory
replenishments in 2014
- Cabinets and Related Products’ net
sales increased 5 percent, fueled by continued growth in the retail
and dealer channels
- Other Specialty Products’ net sales
increased 8 percent, led by the strong performance of our North
American windows business
“Our fourth quarter results illustrate our ability to deliver
consistent and profitable growth,” said Masco President and CEO,
Keith Allman. “Exceptional improvement in our U.S. cabinet business
drove increased revenue and profit. Our industry-leading plumbing
businesses continued their excellent performance trend and
delivered another quarter of outstanding results. In our Decorative
Architectural Products segment, the ongoing momentum of Behr Pro®
and Liberty Hardware was masked by challenging year-over-year
comparisons, while our windows businesses benefitted from increased
demand in the U.S. and U.K.”
2015 Full Year Key
Highlights
- Sales for the full year increased 2
percent to $7.1 billion; sales increased 6 percent excluding the
impact of foreign currency translation
- Adjusted operating profit grew 19
percent to $927 million
- Adjusted operating profit margin for
the full year increased to 13 percent, a 190 basis point
expansion
- Adjusted EPS for the year grew 35
percent to $1.19 per common share
2015 Full Year
Commentary
- Compared to full-year 2014, net sales
increased 2 percent to $7.1 billion. In local currency, North
American sales increased 6 percent and international sales
increased 5 percent
- Compared to full-year 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 profit margins were 31.6 percent
compared to 29.9 percent
- Operating profit margins were 13.0
percent compared to 11.1 percent
- Income from continuing operations was
$1.19 per common share compared to $0.88 per common share
- Income from continuing operations, as
reported, was $1.03 per common share compared to $2.28 per common
share in 2014
- Free cash flow was nearly $500
million
“2015 was a transformative year for Masco,” said Keith Allman.
“On June 30, 2015, we successfully completed the spinoff of our
services businesses, transforming Masco into a branded home
improvement and building products company. Our clear strategy and
focused execution enabled us to reach a number of milestones. We
achieved record sales at Delta, Hansgrohe and Watkins and returned
our U.S. cabinet business to profitability by improving adjusted
operating profit over $80 million. We also strengthened our balance
sheet by generating nearly half a billion dollars in free cash flow
and we ended the year with $1.7 billion of liquidity. Furthermore,
we demonstrated our continued commitment to return capital to
shareholders by increasing our dividend and repurchasing over 17
million shares.”
2016 Outlook
“We look forward to capitalizing on the momentum we’ve built
this past year,” continued Mr. Allman. “We remain confident in our
ability to successfully execute against our long term growth
strategies by leveraging our industry leading positions, robust
innovation pipeline and our Masco Operating System. We expect that
these growth strategies, coupled with our disciplined capital
allocation approach, will continue to create shareholder value in
2016.”
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 Hot Spring® 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
www.masco.com.
The 2015 fourth 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, February 9, 2016 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 19596574. 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 19596574.
The telephone replay will be available approximately two hours
after the end of the call and continue through March 9, 2016.
Safe Harbor Statement
This press release contains statements that reflect our views
about our future performance and 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 the levels of home
improvement activity and new home construction, our ability to
maintain our strong brands and to develop and introduce new and
improved products, our ability to maintain our competitive position
in our industries, our reliance on key customers, our ability to
achieve the anticipated benefits of our strategic initiatives, our
ability to sustain the performance of our cabinetry businesses, the
cost and availability of raw materials, our dependence on third
party suppliers, and risks associated with international operations
and global strategies. These and other factors are discussed in
detail 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.
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Masco CorporationInvestor
ContactIrene TasiDirector – Investor
Relations313.792.5500irene_tasi@mascohq.com
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