2011 Second Quarter Commentary
- Sales declined one percent to $2.0 billion.
- Results for key financial measures, as adjusted for certain items
(see Exhibit A) and with a normalized tax rate of 36 percent, compared
to the second quarter of 2010 were as follows:
- Gross profit margins were 26.9 percent compared to 28.4 percent.
- Operating profit margins were 5.5 percent compared to 8.3 percent.
- Income was $.05 per common share compared to $.16 per common share.
- Income, as reported, was $.02 per common share compared to $.01 per common share for the second quarter of 2010.
- Working capital as a percent of sales improved to 15.6 percent at June 30, 2011, compared to 16.1 percent at June 30, 2010.
- We ended the second quarter of 2011 with over $1.6 billion of cash.
Taylor, Mich., (July 25, 2011) - Masco Corporation
(NYSE: MAS) today reported that net sales for the second quarter ended
June 30, 2011 decreased one percent to $2.0 billion, compared to the
second quarter of 2010. North American sales decreased six percent and
International sales increased 18 percent. In local currencies,
International sales increased five percent compared with the second
quarter of 2010.
Income was $.05 per common share and $.16 per common share for the
second quarters of 2011 and 2010, respectively, excluding the items in
Exhibit A and with a normalized tax rate of 36 percent. Including these
items, income, as reported was $.02 per common share and $.01 per common
share for the second quarters ended June 30, 2011 and 2010,
respectively.
"Our sales would have increased one percent (excluding cabinet
products that we have exited, as previously announced) compared to
second quarter 2010, reflecting strong sales of plumbing related
products driven by share gains of our Hansgrohe and Delta brands and
foreign currency translation. The second quarter of 2011 was negatively
impacted by continued declines in new home construction and in the
deferral of "big ticket" repair and remodel activity," said Tim Wadhams.
"We completed several of the major initiatives that have been underway
in our installation services and North American cabinet operations which
marked significant milestones for these businesses. We believe that our
installation business gained share sequentially in the second quarter
of 2011 and our North American cabinet business maintained share in the
second quarter of 2011, continuing the momentum from the first quarter
of 2011. In addition, we further reduced cabinet capacity by idling
another manufacturing facility."
Income for the three months ended June 30, 2011 included $33 million
of pre-tax gains ($.06 per common share, after tax) related to the sale
of financial investments. Income for the three months ended June 30,
2010 included $33 million of pre-tax charges ($.06 per common share,
after tax) related to the impairment of financial investments.
We continue to focus on the rationalization of our businesses,
including business consolidations, plant closures, headcount reductions,
system implementations and other initiatives. During the second
quarters of 2011 and 2010, we incurred costs and charges of $15 million
pre-tax ($.03 per common share, after tax) and $51 million pre-tax ($.09
per common share, after tax), respectively, related to these
initiatives.
Outlook 2011
"The lack of job creation, high cost of energy and declining consumer
confidence have made forecasting the timing and strength of the
recovery extremely difficult. Most economists have reduced their
forecasts for 2011, including housing start levels which are now
projected to be flat with 2010. As such, we believe that growth in the
second half of 2011 will be challenged. Longer-term however, we are
confident about the fundamentals for the new home construction and home
improvement markets and we are optimistic about the future," said Tim
Wadhams. "We will continue to focus on the things we can control to
improve our execution and strengthen our brands. We have several new
programs that we are funding today that we believe will drive future
growth opportunities across our businesses. We are very encouraged with
the progress we are making to increase our penetration with North
American cabinet dealers and with the professional painter. We also have
exciting new programs that will launch later this year in plumbing,
cabinets and builders hardware and we continue to invest in the
development of international opportunities for paint and plumbing. We
expect that improvements in our markets and in consumer spending,
together with the changes we are driving across Masco and our financial
strength will create significant 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 2011 second quarter supplemental material, including a
presentation in PDF format, will be distributed after the market closes
on July 25, 2011 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, July 26, 2011 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) 312-9304 (confirmation #6636952). 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 #6636952)
approximately two hours after the end of the call and will continue
through August 2, 2011.
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 in this press release that reflect our views
about our future performance constitute "forward-looking statements"
under the Private Securities Litigation Reform Act of 1995.
Forward-looking statements can be identified by words such as "believe,"
"anticipate," "appear," "may," "will," "intend," "plan," "estimate,"
"expect," "assume," "seek," and similar references to future periods.
These views involve risks and uncertainties that are difficult to
predict and, accordingly, our actual results may differ materially from
the results discussed in our forward-looking statements. We caution you
against relying on any of these forward-looking statements. Our future
performance may be affected by our reliance on new home construction and
home improvement, our reliance on key customers, the cost and
availability of raw materials, shifts in consumer preferences and
purchasing practices, and our ability to achieve cost savings through
the Masco Business System and other initiatives. These and other factors
are discussed in detail in Item 1A, "Risk Factors" in our most recent
Annual Report on Form 10-K, as well as in our Quarterly Reports on Form
10-Q and in other filings we make with the Securities and Exchange
Commission. Our forward-looking statements in this press release speak
only as of the date of this press release. Factors or events that could
cause our actual results to differ may emerge from time to time, and it
is not possible for us to predict all of them. Unless required by law,
we undertake no obligation to update publicly any forward-looking
statements as a result of new information, future events or otherwise.
The Company believes that the non-GAAP performance measures and
ratios that are contained herein, 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 is contained in the Company's
filings with the Securities and Exchange Commission and is available on
Masco's Web site at www.masco.com.
Investor / Media Contact
Maria Duey
Vice President - Investor Relations and Communications
313.792.5500
maria_duey@mascohq.com
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