Taylor, Michigan (August 3, 2004) - Masco Corporation (NYSE: MAS)
today reported that net sales from continuing operations for the second
quarter ended June 30, 2004 increased 16 percent to a quarterly record
$3.1 billion compared with $2.6 billion for the same period in 2003.
The Company's strong second quarter performance, including 16 percent
organic sales growth, benefited from market share gains, new products
and positive economic conditions impacting the new home construction and
home improvement markets.
Income from continuing operations for the second quarter of 2004 was
$294 million compared with $220 million for the same period in 2003.
Earnings from continuing operations increased to a second quarter record
of $.65 per common share compared with $.44 per common share for the
2003 second quarter. Results for the 2004 second quarter include
after-tax income of $.01 per common share related to insurance proceeds
from the Behr litigation and after-tax incremental income of $.01 per
common share (compared with the 2003 second quarter) from the sale of
marketable securities and other non-operating assets.
Second quarter 2003 operating performance was negatively impacted by
adverse weather conditions, which reduced demand for certain of the
Company's products, and by a non-cash charge of $23 million ($.03 per
common share, after tax) resulting from a system failure at one of the
Company's European operations.
The Company continues to experience better-than-expected sales
performance thus far in 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 $2.25 to
$2.30 per common share. This new guidance represents an increase from
the previous guidance of $2.00 to $2.10 per common share. This new
guidance includes the benefit of recent common share repurchases and
continues to reflect increases in a number of operating expenses,
including such items as certain material, freight, energy and insurance
costs, as well as costs and expenses associated with complying with the
new requirements of the Sarbanes-Oxley Legislation. This new guidance
also includes realized income related to the Behr litigation of $.04 per
common share in the first half of 2004 but excludes any future Behr
litigation income (as such amounts cannot be predicted), any gains or
charges for businesses to be divested and any other possible unusual
items.
Based on current business trends, the Company anticipates that third
quarter 2004 earnings from continuing operations will be in a range of
$.57 to $.60 per common share compared with relatively strong third
quarter 2003 earnings of $.53 per common share.
The Company previously announced, in the first quarter of 2004, the
planned disposition of several European businesses that are not core to
the Company's long-term growth strategy. The second quarter 2004
results include after-tax income from their operations of $11 million,
and an additional after-tax charge aggregating $44 million ($.10 per
common share) for those businesses that are expected to be divested at a
loss, both of which are included in discontinued operations. The
charge (reduction in expected proceeds) principally relates to
operations located in Spain and is primarily the result of
lower-than-expected operating results of those operations. Any gains
resulting from the disposition of individual businesses, which are
expected later this year, will be recognized as such transactions are
completed, and the Company continues to expect that the gains will
substantially offset the 2004 charges. Including the operating results
of these discontinued operations and the second quarter charge for
certain of these businesses, net income for the quarter increased to
$261 million compared with $229 million for the 2003 second quarter; and
earnings increased to $.58 per common share compared with $.46 per
common share for the second quarter of 2003.
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 August 3, 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) 981-5522 (confirmation #119503). 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 #119503) approximately two hours after the
end of the call and will continue through August 10, 2004.
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 website at www.masco.com.
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 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's products, markets and conditions, which could affect the
Company's 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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