Masco Corporation Highlights:
Third Quarter 2005
- Net sales from continuing operations increased six percent to a record
$3.4 billion.
- Income from continuing operations was $262 million or $.61 per common share.
- The Company returned $250 million to shareholders through share repurchases and dividends.
- The Company had over $1.5 billion in cash at September 30, 2005.
Taylor, Michigan (November 1, 2005) – Masco Corporation (NYSE: MAS)
today reported that net sales from continuing operations for the quarter
ended September 30, 2005 increased six percent to a record $3.4 billion
compared with $3.2 billion for the third quarter of 2004.
Income from continuing operations for the third quarter of 2005 was $262
million or $.61 per common share compared with $289 million or $.64 per
common share for the comparable period of 2004. Results for the third
quarter of 2005 were reduced by $.08 per common share, net, reflecting:
impairment charges for certain financial investments, charges for a
discontinued product line and headcount reductions related to the
Company's Plumbing Products segment and currency transaction gains.
Results for the third quarters of 2005 and 2004 benefited from other
income of $.04 and $.01 per common share, respectively, principally net
gains from financial investments.
While third quarter 2005 sales and earnings benefited from the strong
new construction market and certain selling price increases, the
Company's third quarter results were adversely affected by recent
additional increases in commodity, energy and freight costs, as well as
product mix.
The third quarter of 2004 results include income from discontinued
operations of $.02 per common share, a net gain of $.21 per common share
for those businesses sold in the third quarter of 2004 and an
impairment charge of $.07 per common share for those businesses that
were expected to be divested at a loss, all of which were 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 third
quarter was $359 million or $.80 per common share. The third 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 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, which
began in early 2005, will reduce annual costs by $200 million by the end
of 2007. While the Company may incur expenses and charges related to
these programs, implementing these initiatives should improve the
Company's earnings outlook for 2006 and beyond.
The Company believes that higher energy costs and recent trends
indicating lower consumer confidence and the related slowing in sales of
certain retail products will continue. Given these factors, together
with recent additional commodity cost increases, most of which are not
expected to be offset by selling price increases until the first half of
2006, the Company believes, based on current business trends, that
fourth quarter 2005 earnings from continuing operations will be in the
range of $.48 to $.52 per common share and that full-year 2005 earnings
from continuing operations are expected to be in a range of $2.20 to
$2.24 per common share compared with the Company's previous guidance of
approximately $2.30 per common share. The Company's guidance excludes
any additional costs associated with its profit improvement programs and
any other items.
Fourth quarter 2004 earnings from continuing operations were $.55 per
common share excluding the impact of the non-cash goodwill impairment
charge of $.31 per common share. Including the charge, reported
earnings were $.23 per common share. Results for the fourth quarter of
2004 benefited from gains from the sale of financial investments of $.06
per common share, partially offset by an impairment charge of $.03 per
common share, related to certain financial investments. Results also
benefited by $.02 per common share from a reduction in the Company's tax
rate related to the utilization of foreign tax credits generated in the
fourth quarter on distributions of foreign earnings.
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, November 1, 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 (913) 981-4912 (confirmation #4842826). 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 #4842826) approximately two hours after the end of
the call and will continue through November 8, 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.
Contact:
Maria Duey
313-792-5500
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