First Quarter 2009
Taylor, Mich., (April 27, 2009) - Masco Corporation (NYSE: MAS)
today reported that net sales from continuing operations for the quarter
ended March 31, 2009 declined 26 percent to $1.8 billion compared with
$2.5 billion for the first quarter of 2008. North American sales
declined 24 percent and International sales declined 31 percent. In
local currencies, International sales declined 18 percent compared with
the first quarter of 2008.
The first quarter of 2009 results were adversely affected by
significantly lower sales volume of new home construction products and
services, as well as a continued decline in consumer spending for home
improvement products in both North American and International markets.
(Loss) from continuing operations was $(.23) per common share in the
first quarter of 2009 compared to income from continuing operations of
$.04 per common share in the first quarter of 2008.
The Company continues to focus on the rationalization of its
businesses, including business consolidations, plant closures, headcount
reductions, system implementations and other initiatives. During the
first quarters of 2009 and 2008, the Company incurred costs and charges
of $24 million pre-tax ($.04 per common share, after tax) and $9 million
pre-tax ($.02 per common share, after tax), respectively, related to
these initiatives. In the first quarter of 2009, the Company announced
the closure of two manufacturing facilities, reduced headcount by
approximately 3,000 (which represents approximately eight percent of its
current workforce) and reduced installation branches by 6 locations.
Since late 2006, the Company has aggressively reduced its cost structure
including closing 19 manufacturing facilities, reducing headcount by
approximately 27,000 (which represents approximately 50 percent of its
North American workforce) and reducing installation branches by over 85
locations.
During the first quarter of 2009 and 2008, the Company recognized
non-cash, pre-tax impairment charges for financial investments
aggregating $3 million ($.01 per common share, after tax) and $26
million ($.05 per common share, after tax), respectively, and pre-tax
currency losses of $2 million and $11 million ($.02 per common share,
after tax), respectively. In addition, although the Company had a loss
before taxes on a consolidated basis, tax expense for the first quarter
of 2009 was $8 million ($.02 per common share) reflecting income tax
liabilities in certain jurisdictions where losses provided no tax
benefit.
Outlook 2009
Business conditions remain difficult in the Company's markets. The
Company currently estimates that 2009 housing starts will decline 40
percent to approximately 550,000 units. The Company also anticipates
that consumer spending for home improvement products and demand for
certain of the Company's International products will continue at
depressed levels in the near-term.
While the unprecedented changes in the global economic and financial
market environment make forecasting future business conditions extremely
difficult, the Company currently estimates that its 2009 sales will
decline approximately 20 to 25 percent compared to 2008. The Company's
previous guidance estimated that its full- year 2009 percentage sales
decline would be mid-to-high teens.
The Company currently estimates that its 2009 full-year loss will be
in a range of $(.15) to $(.35) per common share, reflecting the
additional sales decline. The guidance also includes approximately $26
million pretax ($.05 per common share, after tax) of additional costs
and charges for plans undertaken to further rationalize the Company's
business (resulting in a full-year total of approximately $70 million
pre-tax, $.13 per common share after-tax), but does not include any
additional costs and charges that may result from the continued
evaluation of the Company's businesses or any other charges. The
Company's previous guidance was a range of approximate break-even to a
loss of $(.30) per common share for the full-year 2009.
The Company continues to estimate that 2009 free cash flow (cash from
operations, after capital expenditures and before dividends) will be
relatively strong and approximate $300 million.
Although the Company is confident that the long-term fundamentals for
the new home construction and home improvement markets are positive,
the Company expects that market conditions will be extremely challenging
over the next several quarters, given the continued uncertainty in the
global economic and financial markets. Accordingly, the Company will
focus on liquidity preservation to ensure its ability to fund its
business operations, growth opportunities that may arise and relatively
modest debt maturity due in early 2010. The Company has significantly
enhanced its financial flexibility by reducing its quarterly dividend,
as previously announced, to $.075 per common share ($.30 annually) from
$.235 per common share ($.94 annually). This action will save the
Company approximately $240 million of cash on an annual basis. In
addition, in late April 2009, the Company and its Bank Group, at the
Company's initiation, modified the terms of its Five-Year Revolving
Credit Facility, increasing its borrowing capacity to $1.25 billion.
The Company believes that its financial position (including cash of over
$800 million at March 31, 2009, its ability to generate positive cash
flow during 2009 and unused bank lines) together with its current
strategy of investing in leadership brands, innovative growth and
flexible and scalable supply chains, will allow us to drive long-term
growth and create value for our shareholders.
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.
The 2009 first quarter supplemental material, including a
presentation in PDF format, will be distributed after the market closes
on April 27, 2009 and will be available on the Company's Web site at www.masco.com.
A conference call regarding items contained in this release is
scheduled for Tuesday, April 28, 2009 at 8:00 a.m. ET. Participants in
the call are asked to register five to ten minutes prior to the
scheduled start time by dialing (913) 312-0860 (confirmation #2339945).
The conference call will be webcast simultaneously on the Company's Web
site 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 Web site. A replay of the call will be
available on Masco's Web site or by phone by dialing (719) 457-0820
(replay access code #2339945) approximately two hours after the end of
the call and will continue through May 5, 2009.
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 Web site at www.masco.com.
Statements contained herein, or otherwise made available, that reflect
the Company's views about its future performance may constitute
"forward-looking statements" under the Private Securities Litigation
Reform Act of 1995. These views involve risks and uncertainties that are
difficult to predict and the Company's results may differ materially
from the results discussed in such forward-looking statements. For
further information, refer to our most recent Annual Report on Form 10-K
(particularly the "Risk Factors" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" sections) and
to any subsequent Quarterly Reports on Form 10-Q, all of which are on
file with the Securities and Exchange Commission. The Company undertakes
no obligation to update any forward-looking statements, whether as a
result of new information, future events or otherwise. Certain of the
financial and statistical data made available are non-GAAP financial
measures as defined by the SEC's Regulation G. The Company believes that
such non-GAAP performance measures and ratios used in managing the
business may provide users with 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
is contained in the Company's filings with the SEC and is available on
Masco's Web site.
Investor / Media Contact
Maria Duey
Vice President - Investor Relations
313.792.5500
maria_duey@mascohq.com
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