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Masco Reports Strong Net Sales and Operating Profit Growth in Second Quarter 2015

Published on 2015-08-03. Author : SpecialChem

TAYLOR, MICH. -- Masco Corporation, one of the world’s leading manufacturers of branded home improvement and building products, reported net sales and operating profit growth in the second quarter of 2015. All segments contributed to a 14.5 percent adjusted operating profit margin, representing a 22 percent increase over prior year.

“Continued growth momentum, solid execution, and the timing of paint promotions enabled us to achieve earnings above our expectations for the quarter,” said Masco’s President and CEO Keith Allman. “Importantly, our Cabinets and Related Products segment accelerated the pace of its turnaround, resulting in better than expected top and bottom line results for that segment. In addition to our strong sales and profit growth, we returned nearly USD 270 million to shareholders through dividends and share repurchases in the first half of 2015.”

Masco
Fig. 1: Masco

2015 Second Quarter Commentary

• Net sales from continuing operations increased 3 percent to USD 1.9 billion. North American sales increased 7 percent and international sales decreased 10 percent in U.S. dollars but increased 5 percent in local currency
• Compared to second quarter 2014, 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 margins improved to 33 percent compared to 30.7 percent
• Operating margins improved to 14.5 percent compared to 12.2 percent
• Income from continuing operations was USD .38 per common share compared to USD .28 per common share
• Income from continuing operations, as reported, was USD .31 per common share
• Liquidity at the end of the second quarter was approximately USD 1.5 billion
• Approximately 3.8 million shares were repurchased in the second quarter

2015 Second Quarter Operating Segment Highlights

• Plumbing Products’ net sales were flat, but increased 7 percent excluding the effects of foreign currency translation, fueled by ongoing strength in the wholesale and retail channels
• Decorative Architectural Products’ net sales increased 4 percent, driven by new products and the pro paint initiative
• Cabinets and Related Products’ net sales increased 6 percent, driven by KraftMaid® Cabinetry’s sales growth with home centers and dealers
• Other Specialty Products’ net sales increased 8 percent, led by Milgard Windows’ strong performance across all channels and geographies

Outlook

“Masco has delivered a strong first half of the year and we are proud of our focus and execution,” said Mr. Allman. “With the completion of the spin-off of TopBuild Corp., we begin a new chapter in Masco’s history focused on driving shareholder value through our portfolio of industry-leading branded building products, operational excellence and disciplined capital allocation. Our Cabinetry business has returned to profitability and we expect the momentum it has built over the first half of the year to continue. For the balance of 2015, we believe the underlying demand for our market-leading products will increase and that the repair and remodeling environment will continue to improve. We believe we are positioned to capitalize on these opportunities. Reflecting confidence in Masco’s future outlook, our Board of Directors intends to increase our annual dividend by USD 0.02 per share to USD 0.38 beginning with the quarterly dividend to be paid in the fourth quarter of 2015.”

About Masco

Headquartered in Taylor, Mich., Masco Corporation is one of the global leaders in the design, manufacture and distribution of branded home improvement and building products. Its portfolio of brands includes Behr® paint; Delta® and Hansgrohe® faucets, bath and shower fixtures; KraftMaid® and Merillat® cabinets; Milgard® windows and doors; and HotSpring® spas. It leverages its powerful brands across product categories, sales channels and geographies to create value for its customers and shareholders.

Source: Masco
 


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