Masco Corporation Reports Third Quarter 2019 Results

October 30, 2019

Key Results

•  Sales increased 2 percent to $1.9 billion; in local currency, sales increased 3 percent
•  Operating profit for the quarter increased 10 percent to $316 million; adjusted operating profit increased 8 percent to $326 million
•  Earnings per share from continuing operations increased 16 percent to $0.64 per share; adjusted earnings per share from continuing operations increased 11 percent to $0.68 per share
•  Updating 2019 anticipated earnings per share from continuing operations to be in the range of $2.41 - $2.45 per share, and on an adjusted basis, to be in the range of $2.52 - $2.56 per share
•  Windows businesses accounted for as discontinued operations

LIVONIA, Mich. (October 30, 2019) - Masco Corporation (NYSE: MAS), one of the world’s leading manufacturers of branded home improvement and building products, reported its third quarter results.

“We delivered solid sales and operating profit growth in the quarter, as well as strong margin expansion,” said Masco President and CEO, Keith Allman.  “This performance was driven by growth in both our Plumbing Products and Decorative Architectural Products segments.  Additionally, we continued our focus on creating shareholder value and returned $186 million to shareholders through share repurchases and dividends during the quarter.”

2019 Third Quarter Commentary

•  On a reported basis, compared to third quarter 2018:

  •  Net sales increased 2 percent to $1.9 billion; in local currency, net sales increased 3 percent
  •  In local currency, North American sales increased 3 percent and international sales increased 5 percent
  •  Gross margins increased 150 basis points to 34.2 percent from 32.7 percent
  •  Operating profit increased 10 percent to $316 million
  •  Operating margins increased 120 basis points to 16.2 percent from 15.0 percent
  •  Income from continuing operations increased to $0.64 per share, compared to $0.55 per share

•  Compared to third quarter 2018, results for key financial measures, as adjusted for certain items (see Exhibit A) and with a normalized tax rate of 25 percent, were as follows:

  •  Gross margins increased 80 basis points to 34.4 percent compared to 33.6 percent
  •  Operating profit increased 8 percent to $326 million from $303 million
  •  Operating margins increased 80 basis points to 16.7 percent compared to 15.9 percent
  •  Income from continuing operations increased to $0.68 per share, compared to $0.61 per share

•  Liquidity at the end of the third quarter was $475 million
•  Repurchased 3.8 million shares in the quarter

2019 Third Quarter Operating Segment Results

•  Plumbing Products’ net sales increased 1 percent (3 percent excluding the impact of foreign currency) due to growth in both North America and international
•  Decorative Architectural Products’ net sales increased 5 percent due to strong growth in paints and other coating products
•  Cabinetry Products’ net sales decreased 3 percent due to mix, partially offset by pricing

“We are pleased with our performance in the third quarter and with the progress we are making on the anticipated divestitures of our Cabinetry and Windows businesses.  During the quarter we completed the sale of our UK Window business and announced the signing of a definitive agreement to sell our Milgard Windows and Doors business,” said Allman.  “After accounting for our Windows businesses as discontinued operations, we now expect adjusted earnings per share from continuing operations to be in the range of $2.52-$2.56 for the full year.”


About Masco

Headquartered in Livonia, Michigan, Masco Corporation is a global leader in the design, manufacture and distribution of branded home improvement and building products.  Our portfolio of industry-leading brands includes Behr® paint; Delta® and Hansgrohe® faucets, bath and shower fixtures; KraftMaid® and Merillat® cabinets; Kichler® decorative and outdoor lighting; and HotSpring® spas.  We leverage our powerful brands across product categories, sales channels and geographies to create value for our customers and shareholders.  For more information about Masco Corporation, visit www.masco.com.

The 2019 third quarter supplemental material, including a presentation in PDF format, is available on Masco’s website at www.masco.com.

Conference Call Details

A conference call regarding items contained in this release is scheduled for Wednesday, October 30, 2019 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 (855) 226-2726 (855-22MASCO) and from outside the U.S. at (706) 679-3614.  Please use the conference identification number 4086468.  The conference call will be webcast simultaneously and in its entirety through Masco’s website.  Shareholders, media representatives and others interested in Masco may participate in the webcast by registering through the Investor Relations section on Masco’s website.

A replay of the call will be available on Masco’s website or by phone by dialing (855) 859-2056 and from outside the U.S. at (404) 537-3406.  Please use the conference identification number 4086468.  The telephone replay will be available approximately two hours after the end of the call and continue through November 30, 2019.

Safe Harbor Statement

This press release contains statements that reflect our views about our future performance and constitute “forward-looking statements” under the Private Securities Litigation Reform Act of 1995.  Forward-looking statements can be identified by words such as “outlook,” “believe,” “anticipate,” “appear,” “may,” “will,” “should,” “intend,” “plan,” “estimate,” “expect,” “assume,” “seek,” “forecast,” and similar references to future periods.  Our views about future performance 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 the levels of residential repair and remodel activity and new home construction, our ability to maintain our strong brands and reputation and to develop new products, our ability to maintain our competitive position in our industries, our reliance on key customers, the cost and availability of raw materials and increasing tariffs, our dependence on third-party suppliers, risks associated with international operations and global strategies, our ability to achieve the anticipated benefits of our strategic initiatives, including the potential divestitures of our Cabinetry and Windows businesses, our ability to successfully execute our acquisition strategy and integrate businesses that we have and may acquire, our ability to attract, develop and retain talented personnel, risks associated with our reliance on information systems and technology, and our ability to achieve the anticipated benefits from our investments in new technology.  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.  Any forward-looking statement made by us speaks only as of the date on which it was made.  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.

 

Investor Contact

David Chaika
Vice President, Treasurer and Investor Relations
313.792.5500
david_chaika@mascohq.com

Click here to view the Q2 2019 Analyst Package.