Taylor, Michigan (February 13, 2004) - Masco Corporation (NYSE: MAS)
today reported that net sales from continuing operations for the year
ended December 31, 2003, aided by acquisitions, increased 20 percent to a
record $10.9 billion compared with $9.1 billion for 2002.
Income from continuing operations for the year ended December 31, 2003
was $740 million or $1.51 per common share, which includes the
recognition of a non-cash, pre-tax goodwill impairment charge of $142
million ($118 million or $.24 per common share, after tax), the majority
of which relates to European businesses that the Company plans to
divest. In addition, the Company's results include previously announced
charges primarily related to certain European businesses and income from
an adjustment of the Behr litigation accrual, which principally offset
each other.
Excluding the impact of the goodwill impairment charge, income from
continuing operations was $1.75 per common share. This result is above
the Company's previous guidance that earnings, excluding any fourth
quarter 2003 unusual items, would be in the range of $1.68 to $1.70 per
common share.
Fourth quarter 2003 net sales from continuing operations increased 18
percent to $2.9 billion compared with $2.4 billion in the 2002 fourth
quarter. Income from continuing operations for the fourth quarter of
2003 was $93 million or $.19 per common share and included a non-cash,
pre-tax charge for goodwill impairment of $137 million ($113 million or
$.24 per common share, after tax). Excluding such charge, income from
continuing operations was $.43 per common share.
The Company reviews its business portfolio on an ongoing basis as part
of its corporate strategic planning and has determined that several of
its European businesses are not core to the Company's long-term growth
strategy and, accordingly, has embarked on a plan of disposition. These
businesses had combined 2003 net sales in excess of $350 million and the
Company expects net proceeds from the dispositions to exceed $300
million. The dispositions are expected to be completed within the next
twelve months and the Company expects to recognize a modest net loss
upon the disposition of all of these businesses. First quarter 2004
results will include a charge to reflect those businesses that are
expected to be divested at a loss. Any gains resulting from the
disposition of individual businesses will be recognized as such
transactions are completed.
The Company continues to experience favorable sales performance in early
2004, and, based on current business trends, believes that it will
achieve record sales and earnings for 2004 with full-year earnings from
continuing operations in a range of $1.80 to $1.90 per common share.
Earnings guidance for 2004 includes a reduction of approximately $.05
per common share resulting from the absence of earnings related to the
European businesses to be divested. These businesses will be treated as
discontinued operations effective in the first quarter of 2004, which
will include the reclassification of their prior period results to
discontinued operations. This year's earnings guidance also reflects the
Company's expectation that certain operating expenses will continue to
increase in 2004, including such items as energy, insurance and certain
material and freight costs.
Based on current business trends, the Company anticipates that first
quarter 2004 earnings from continuing operations (seasonally the lowest
quarter of the year) may be in a range of $.36 to $.38 per common share
(excluding the disposition charge), compared with first quarter 2003
reported earnings of $.32 per common share.
Masco Corporation 2003 Highlights:
Full-Year 2003
- Net sales from continuing operations increased 20 percent to a record $10.9 billion.
- Key retailer sales were up 10 percent to approximately $3.4 billion.
- Income from continuing operations was $1.75 per common share excluding the impact of a goodwill impairment charge.
- The Company retired approximately $430 million of Company debt during 2003.
- The Company repurchased 37 million shares in 2003 including
approximately 2 million shares for employee long-term stock incentive
plans.
- Working capital (defined as accounts receivable and inventories
less accounts payable) as a percentage of sales improved to 18.1 percent
of sales at December 31, 2003 from 22.5 percent of sales a year
earlier.
- The Company has approximately $1.3 billion of cash and marketable securities at year-end.
Fourth Quarter 2003
- Net sales from continuing operations increased 18 percent to a record $2.9 billion.
- Key retailer sales were up 22 percent.
- Income from continuing operations was $.43 per common share
excluding the impact of a goodwill impairment charge compared to $.36
per common share in 2002.
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.
A conference call regarding items contained in this release is scheduled
for Friday, February 13, 2004 at 11:00 a.m. ET. Participants in the
call are asked to register five to ten minutes prior to the scheduled
start time by dialing (913) 981-4900 (confirmation #675846). The
conference call will be webcast simultaneously on the Company's website
at
www.masco.com and supplemental
material, including the financial data referred to on the call and a
reconciliation of all non-GAAP information provided on the call, will
also be available on the website. A replay of the call will be available
on Masco's website or by phone by dialing (719) 457-0820 (replay access
code #675846) approximately two hours after the end of the call and
will continue through February 19, 2004.
Masco Corporation's press releases and other information are available
through the Company's toll free number, 1-888-MAS-NEWS, or you may visit
Masco's website at
www.masco.com. For press releases, click on "Investor Relations" and then on "Link to News Center."
Statements contained herein may include certain forward-looking
statements regarding Masco's future sales, earnings growth potential and
other developments. Actual results may vary materially because of
external factors such as interest rate fluctuations, changes in consumer
spending and other factors over which management has no control. The
Company believes that certain non-GAAP performance measures and ratios,
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 financial measures and
ratios should be viewed in addition to, and not as an alternative for,
the Company's reported results. Additional information about our
products, markets and conditions, which could affect our future
performance, 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 undertakes no obligation to update any forward-looking
statements, whether as a result of new information, future events or
otherwise.
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