Masco Corporation Highlights:
Second Quarter 2005
- Net sales from continuing operations increased nine percent to a record
$3.3 billion.
- Income from continuing operations was $274 million or $.64 per common share.
- The Company returned $229 million to shareholders through share repurchases and dividends.
- The Company issued $500 million of fixed-rate 4.80% notes due
2015 and had over $1.6 billion in cash and marketable securities at June
30, 2005.
Taylor, Michigan (August 2, 2005) – Masco Corporation (NYSE: MAS) today
reported that net sales from continuing operations for the quarter ended
June 30, 2005 increased nine percent to a record $3.3 billion compared
with $3.1 billion for the second quarter of 2004.
Income from continuing operations for the second quarter of 2005 was
$274 million or $.64 per common share compared with $294 million or $.65
per common share for the comparable period of 2004. Results for the
second quarter of 2005 benefited from other income, principally net
gains from financial investments, of $.04 per common share, partially
offset by realized currency transaction losses of $.02 per common share.
The second quarter of 2004 benefited from $.03 per common share of
other income, principally net gains from financial investments and other
non-operating assets, as well as $.01 per common share of income
related to insurance proceeds from the Behr litigation settlement and
$.01 per common share of realized currency transaction gains.
The Company's 2005 first half results were adversely affected by
increases in commodity, energy and freight costs, which have not been
totally recovered due, in part, to the lag in implementing selling price
increases to customers, as well as product mix. Second quarter 2005
sales and earnings, however, were better-than-expected due to the strong
new construction market as well as an improvement in Key Retailer
Sales.
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. Net income for the second
quarter of 2005 did not include any net income (loss) related to
discontinued operations, since the Company completed the disposition
process in the first quarter of 2005. The second quarter of 2004
results include after-tax income from discontinued operations of $11
million, and an additional after-tax charge aggregating $44 million
($.10 per common share) for those businesses that were expected to be
divested at a loss, both of which are included in discontinued
operations. Including the operating results of these discontinued
operations and the charge for certain of these businesses, net income
for the 2004 second quarter was $261 million or $.58 per common share.
The Company is committed to its strategy of value creation and continues
to be focused on the simplification of its business model, cash flow
generation, improvement in return on invested capital and the return of
cash to shareholders through share repurchases and dividends.
Consistent with this strategy, the Company is pursuing a variety of
initiatives to offset cost increases and increase operating profit
including sourcing programs, the restructuring of certain of its
businesses (including consolidations), manufacturing rationalization,
headcount reductions and other profit improvement programs. As
previously disclosed, the Company believes these initiatives will reduce
annual costs by $200 million by the end of 2007. Costs and charges
related to the acceleration of these profit improvement programs, when
combined with recent additional energy-related and commodity cost
increases and the adverse effect of changes in currency values, are
expected to result in the Company's full-year 2005 earnings from
continuing operations being closer to $2.30 per common share than the
previous guidance of approximately $2.40 per common share. Implementing
these initiatives should improve the Company's earnings outlook for
2006 and beyond.
Based on current business trends, the Company anticipates that third
quarter 2005 earnings from continuing operations will be in the range of
$.60 to $.64 per common share compared with third quarter 2004 earnings
from continuing operations of $.64 per common share.
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 Tuesday, August 2, 2005 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 (719) 457-2692 (confirmation #4876876). 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 #4876876) approximately two hours after the
end of the call and will continue through August 9, 2005.
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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Contact:
Maria Duey
313-792-5500