Press release content from BusinessWire. The AP news staff was not involved in its creation.
PRESS RELEASE: Paid content from BusinessWire
Press release content from BusinessWire. The AP news staff was not involved in its creation.

Masco Corporation Reports Second Quarter 2018 Results

July 31, 2018

LIVONIA, Mich.--(BUSINESS WIRE)--Jul 31, 2018--Masco Corporation (NYSE: MAS), one of the world’s leading manufacturers of branded home improvement and building products, reported strong net sales and earnings per share growth in the second quarter of 2018.

“We delivered strong growth across our decorative, plumbing and cabinetry segments this quarter,” said Masco President and CEO, Keith Allman. “This performance was driven by our acquisition of Kichler Lighting, increased volume and pricing actions. We navigated the inflationary environment to deliver adjusted operating profit growth for the quarter. Additionally, we accelerated our planned share repurchases for the year and returned approximately $147 million to shareholders through share repurchases and dividends.”

2018 Second Quarter Commentary

On a reported basis, compared to second quarter 2017: Net sales increased 11 percent to $2.3 billion; in local currency and excluding acquisitions and divestitures, net sales increased 6 percentIn local currency, North American sales increased 12 percent and international sales matched prior yearGross margins decreased 340 basis points to 32.7 percent from 36.1 percentOperating profit decreased 4 percent to $358 million primarily due to the acquisition related inventory step up adjustment of $20 millionOperating margins decreased 240 basis points to 15.6 percent from 18.0 percentNet income increased to $0.68 per share compared to $0.51 per share Compared to second quarter 2017, results for key financial measures, as adjusted for certain items (see Exhibit A) and with a normalized tax rate of 26 percent (34 percent in 2017), were as follows: Gross margins decreased 250 basis points to 33.6 percent compared to 36.1 percentOperating profit increased 2 percent to $380 million from $372 millionOperating margins decreased 150 basis points to 16.5 percent compared to 18.0 percentNet income increased to $0.75 per share, compared to $0.62 per share Liquidity at the end of the second quarter was $384 million 3.0 million shares were repurchased in the second quarter

2018 Second Quarter Operating Segment Highlights

Plumbing Products’ net sales increased 9 percent (6 percent excluding the impact of foreign currency translation), driven by North American and international growth Decorative Architectural Products’ net sales increased 22 percent due to the acquisition of Kichler and growth in paints and other coatings products and builders’ hardware; excluding the acquisition, net sales grew 6 percent Cabinetry Products’ net sales increased 7 percent due to strong growth in the repair and remodel business, partially offset by the divestiture of Moores Windows and Other Specialty Products’ net sales decreased 7 percent; excluding the impact of foreign currency translation and the divestiture of Arrow Fastener, sales matched prior year

“We delivered solid performance in the first half of the year,” said Allman. “I am pleased with our strong top-line growth and our response to the cost pressures we experienced as we implemented price increases to offset inflation and leveraged our SG&A expense. With these actions, we believe we are well positioned for strong top- and bottom-line growth as we enter the second half of the year. Expressing confidence in our future, our Board has announced its intention to raise our annual dividend to $.48 per share beginning in the fourth quarter, a 14 percent increase. Additionally, with our strong free cash flow, we expect to deploy approximately $200 million in the second half of 2018 in either acquisitions or share buybacks, on top of the more than $800 million deployed year to date.”

About Masco

Headquartered in Livonia, Mich., 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; Milgard ® windows and doors; 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 2018 second 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 Tuesday, July 31, 2018 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 9292969. 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 9292969. The telephone replay will be available approximately two hours after the end of the call and continue through August 31, 2018.

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, 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, 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, our ability to achieve the anticipated benefits from our investments in new technology, risks associated with our reliance on information systems and technology, and our ability to sustain the improved results of our U.S. window business. 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.

This article has been truncated. You can see the rest of this article by visiting http://www.businesswire.com/news/home/20180731005250/en.

All contents © copyright 2019 The Associated Press. All rights reserved.