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MASCO CORPORATION REPORTS FOURTH QUARTER RESULTS

February 14, 2006

Masco Corporation 2005 Highlights:

Full-Year 2005

  • Net sales from continuing operations increased seven percent to a record $12.6 billion.
  • Income from continuing operations was $2.19 per common share excluding the impact of a goodwill impairment charge and $2.03 per common share including the impairment charge.
  • Free cash flow before dividends exceeded $1 billion.
  • The Company returned $1.3 billion to shareholders through share repurchases (31 million shares) and dividends.
  • The quarterly dividend was increased by 11 percent, the 47th consecutive year in which dividends have been increased.
  • The Company had over $2 billion of cash and marketable securities at year-end.

Taylor, Michigan (February 14, 2006) – Masco Corporation (NYSE: MAS) today reported that net sales from continuing operations for the year ended December 31, 2005 increased seven percent, primarily from organic growth, to a record $12.6 billion compared with $11.9 billion for 2004.

Income from continuing operations was $941 million or $2.19 per common share, excluding the impact of the non-cash, after-tax goodwill impairment charge of $69 million pertaining to certain European operations. Income from continuing operations for the year ended December 31, 2005 was $872 million or $2.03 per common share, including the impact of the goodwill impairment charge. Income from continuing operations was $1,053 million in 2004 or $2.31 per common share, excluding the impact of the non-cash, after-tax goodwill impairment charge of $104 million. Income from continuing operations was $949 million or $2.08 per common share, including the impact of the goodwill impairment charge.

Results for the year ended December 31, 2005 benefited from the strong new construction market and certain selling price increases, which were more than offset by increases in commodity, energy and freight costs, as well as a less favorable product mix. Results for 2005 also benefited from net gains related to the Company's financial investments.

Fourth quarter 2005 net sales from continuing operations increased six percent to over $3.1 billion compared with $3.0 billion in the 2004 fourth quarter. Income from continuing operations for the fourth quarter of 2005 was $211 million or $.50 per common share, excluding the non-cash, after-tax goodwill impairment charge of $69 million. Including such charge, income from continuing operations was $142 million or $.34 per common share. Income from continuing operations for the fourth quarter of 2004 was $243 million or $.54 per common share, excluding the non-cash, after-tax goodwill impairment charge of $104 million. Including such charge, income from continuing operations was $139 million or $.31 per common share.

Results for the fourth quarter of 2005 benefited from net gains from the sale of financial investments and other assets of $.02 per common share offset by $.02 per common share from an adjustment of deferred taxes related to certain European operations. Results for the fourth quarter of 2004 benefited from net 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 the Company's investment in Furniture Brands International common stock. Results for the 2004 fourth quarter also benefited from a reduction in the Company's tax rate related to the utilization of foreign tax credits generated in the 2004 fourth quarter on distributions of foreign earnings which benefited earnings by $.02 per common share.

During the fourth quarter of 2005, pursuant to the Company's strategy of reviewing its business portfolio for potential consolidations and divestitures, the Company completed the sale of two additional businesses in the Cabinets and Related Products segment with combined annual sales of approximately $200 million for aggregate proceeds of approximately $200 million. The Company recognized a pre-tax net gain on the disposition of these businesses of $50 million, which is included in income from discontinued operations.

Assuming no further significant commodity cost increases and excluding any additional costs associated with its cost reduction programs and any other items, the Company believes, based on current business trends, that it will achieve 2006 full-year earnings from continuing operations in a range of $2.35 to $2.45 per common share. Including planned costs and charges related to plant closures and other profit improvement programs, which are presently expected to approximate $70 million pre-tax in 2006, earnings from continuing operations are expected to be in a range of $2.24 to $2.34 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, February 14, 2006 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) 981-4902 (confirmation #4758760). 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 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 #4758760) approximately two hours after the end of the call and will continue through February 21, 2006.

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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