Masco Corporation: MASCO DELIVERS STRONG GROWTH IN FOURTH QUARTER 2012
MASCO DELIVERS STRONG GROWTH IN FOURTH QUARTER 2012
- Sales increased 9 percent to $1.9 billion
North American sales increased 12 percent
- Installation segment returned to profitability
- All segments contributed to an adjusted operating margin expansion of 340 basis points
Taylor, Mich., (February 11, 2013) - Masco Corporation (NYSE: MAS) increased profit in the fourth quarter of 2012 with strong sales and operating margin growth in North America, including continued improvement in Installation Services. All five operating segments delivered positive sales growth and improved operating profit for the first time since the housing downturn.
2012 Fourth Quarter Commentary
Net sales from continuing operations increased 9 percent to $1.9 billion, compared with $1.7 billion for fourth quarter 2011. North American sales increased 12 percent and international sales decreased 1 percent. In local currencies, international sales increased 2 percent compared with fourth quarter 2011.
Compared to fourth quarter 2011, results for key financial measures, as adjusted for certain items (see Exhibit A) and with a normalized tax rate of 36 percent, were as follows:
Gross profit margins were 25.0 percent compared to 21.9 percent
Operating profit margins were 5.0 percent compared to 1.6 percent
Income (loss) from continuing operations was $0.04 per common share compared to $(0.09) per common share
Loss from continuing operations, as reported, was $(0.23) per common share compared to $(1.42) per common share in the fourth quarter of 2011
We ended the fourth quarter with approximately $1.4 billion of cash
2012 Fourth Quarter Operating Segment Results
Plumbing Products' net sales increased 10 percent, fueled by strong performance in North America and internationally
Decorative Architectural Products' net sales increased 11 percent, driven by growth in core products and new programs
North American Cabinetry's sales increased 13 percent and operating margins improved
Installation and Other Services achieved profitability for the first time since the fourth quarter of 2008
Other Specialty Products' net sales increased 6 percent and segment margins expanded, reflecting share gains and profit improvement initiatives
"Our solid fourth quarter results reflect the successful execution of our strategic initiatives, including leveraging our brands, reducing our costs, improving our Installation and Cabinet segments and strengthening our balance sheet," said Masco's President and CEO, Tim Wadhams. "Our sales and margin growth represent strong performance across all of our operating segments, including a return to profitability in our Installation segment. We believe this momentum will continue into 2013."
2012 Full-Year Commentary
Net sales increased 4 percent to $7.7 billion, compared to 2011. Excluding currency, net sales increased 5 percent
Compared to full-year 2011, results for key financial measures, as adjusted for certain items (see Exhibit B) and with a normalized tax rate of 36 percent, were as follows:
Gross profit margins were 26.0 percent compared to 25.1 percent
Operating profit margins were 6.1 percent compared to 4.4 percent
Income from continuing operations was $0.32 per common share compared to $0.02 per common share
Loss from continuing operations, as reported, was $(0.22) per common share compared to $(1.34) per common share in 2011
In early February we determined that our Danish ready-to-assemble cabinet business is not core to our long-term growth strategy and, accordingly, we have commenced a plan of disposition for this business. This business unit had sales of approximately $250 million in 2012.
"We expect new home construction to show strong growth in 2013, and anticipate repair and remodel to grow modestly, with big ticket items continuing to lag. Our focus this year is to successfully execute new product programs, improve profitability in Cabinets and Installation Services, and expand our brand leadership positions. We believe the actions we have taken over the past several years, including investing in our brands, reducing our cost structure and paying down debt, have strengthened our business. We believe these actions have positively positioned us to take advantage of the upturn in the housing cycle," said Mr. Wadhams.
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 2012 fourth quarter supplemental material, including a presentation in PDF format, is available on the Company's website at www.masco.com.
Conference Call Details
A conference call regarding items contained in this release is scheduled for Tuesday, February 12, 2013 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 (877) 550-4056 and from outside the U.S. at (706) 679-3614. Please use the conference identification number 87003575. The conference call will be webcast simultaneously and in its entirety through the Company's website. Shareholders, media representatives and others interested in Masco may participate in the webcast by registering through the Investor Relations section on the Company's website.
A replay of the call will be available on Masco's Web site or by phone by dialing (855) 859-2056 and from outside the U.S. at (404) 537-3406. Please use the conference identification number 87003575. The telephone replay will be available approximately two hours after the end of the call and continue through February 26, 2013.
Safe Harbor Statement
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," "should," "intend," "plan," "estimate," "expect," "assume," "seek," "forecast," 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, our ability to improve our underperforming businesses, and our ability to maintain our competitive position in our industries. 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 website at www.masco.com.
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Source: Masco Corporation via Thomson Reuters ONE