2011 First Quarter Commentary
- Sales declined four percent to $1.8 billion.
- Results for key financial measures, as adjusted for certain items
(see Exhibit A) and with a normalized tax rate of 36 percent, compared
to the first quarter of 2010 were as follows:
- Gross profit margins were 25.3 percent compared to 26.7 percent.
- Operating profit margins were 3.0 percent compared to 5.0 percent.
- (Loss) income was $(.05) per common share compared to $.03 per common share.
- Loss, as reported, was $(.13) per common share compared to $(.02) per common share for the first quarter of 2010.
- Working capital as a percent of sales improved to 15.5 percent at March 31, 2011, compared to 16.3 percent at March 31, 2010.
- We ended the first quarter of 2011 with over $1.5 billion of cash.
Taylor, Mich., (April 25, 2011) - Masco Corporation
(NYSE: MAS) today reported that net sales for the first quarter ended
March 31, 2011 decreased four percent, to $1.8 billion, compared to the
first quarter of 2010. North American sales decreased seven percent and
International sales increased four percent. In local currencies,
International sales increased five percent compared with the first
quarter of 2010.
(Loss) income was $(.05) per common share and $.03 per common share
for the first quarters of 2011 and 2010, respectively, excluding the
items in Exhibit A and with a normalized tax rate of 36 percent.
Including these items, loss, as reported was $(.13) per common share and
$(.02) per common share for the first quarters ended March 31, 2011 and
2010, respectively.
"As anticipated, the trends impacting our business, including
depressed new home construction, the deferral of "big ticket" repair and
remodel activity and commodity cost pressures have continued into 2011.
In the first quarter of 2011, our sales were down four percent.
Excluding cabinet products that we are exiting, as previously announced,
our sales would have been down just one percent compared to a
relatively strong first quarter of 2010, which benefited from the
homebuyer tax credit that expired in mid-2010. In addition, on that same
basis, sales in February and March of 2011 were basically flat with
2010. Plumbing Products sales were strong in first quarter of 2011
compared to last year and we believe that our North American cabinet
business and our installation business, while still depressed, were able
to gain share sequentially, compared to fourth quarter of 2010. We
continue to manage our cost structure aggressively across our business
and we anticipate that actions we have taken, or expect to take, to
drive productivity, cost reductions, supply chain efficiencies and price
increases will offset the impact of commodity and energy cost increases
and other cost inflations for full-year 2011," said Masco's CEO Tim
Wadhams.
Loss for the three months ended March 31, 2011 included gains of $17
million pre-tax related to the sale of financial investments.
We continue to focus on the rationalization of our businesses,
including business consolidations, plant closures, headcount reductions,
system implementations and other initiatives. During the first quarters
of 2011 and 2010, we incurred costs and charges of $32 million pre-tax
($.06 per common share, after tax) and $14 million pre-tax ($.03 per
common share, after tax), respectively, related to these initiatives.
Outlook 2011
"While we still believe that the second half of 2011 will be stronger
than the first half, our enthusiasm has been tempered somewhat. Job
growth has been modest at best, energy costs have increased, reflecting
the turmoil in the Middle East and most economists have reduced their
forecasts for 2011, including for housing starts. Given the uncertainty
of the timing and strength of the recovery in our markets, we will
continue to focus on the things we can control to improve our execution
and strengthen our brands. The Masco Business System continues to drive
positive change across the Company. Our cabinet integration is on plan
and we expect will drive fixed cost reductions and share gains; we have
strengthened our brands and our focus on innovation is driving exciting
new opportunities across all of our product groups, and we have added
outstanding talent to our leadership teams to enhance the development
and execution of our business strategies," said Tim Wadhams.
Longer-term, we are confident about the fundamentals for the new home
construction and home improvement markets and we are optimistic about
the future. We expect that improvements in our markets and in consumer
spending, together with the changes we are driving across Masco and our
financial strength will create significant value for our shareholders.
Headquartered in Taylor, Michigan, Masco Corporation is one of the
world's leading manufacturers of home improvement and building products,
as well as a leading provider of services that include the installation
of insulation and other building products.
The 2011 first quarter supplemental material, including a
presentation in PDF format, will be distributed after the market closes
on April 25, 2011 and will be available on the Company's Web site at www.masco.com.
A conference call regarding items contained in this release is scheduled
for Tuesday, April 26, 2011 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 (913) 312-9335 (confirmation #1737120). The conference
call will be webcast simultaneously on the Company's Web site at www.masco.com
and supplemental material, including the financial data referred to on
the call and a reconciliation of non-GAAP information provided on the
call, will also be available on the Web site.
A replay of the call will be available on Masco's Web site or by
phone by dialing (719) 457-0820 (replay access code #1737120)
approximately two hours after the end of the call and will continue
through May 3, 2011.
Masco Corporation's press releases and other information are
available through the Company's toll free number, 1-888-MAS-NEWS, or
under the Investor Relations section of Masco's Web site at www.masco.com.
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," "intend," "plan," "estimate,"
"expect," "assume," "seek," 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, shifts in consumer preferences and
purchasing practices, and our ability to achieve cost savings through
the Masco Business System and other initiatives. 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. 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 Web site at www.masco.com.
Investor / Media Contact
Maria Duey
Vice President - Investor Relations and Communications
313.792.5500
maria_duey@mascohq.com
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