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press release

July 29, 2021, 7:00 a.m. EDT

Masco Corporation Reports Second Quarter 2021 Results

Highlights Sales increased 24 percent to $2,179 million; in local currency, sales increased 21 percent Operating profit increased 29 percent to $437 million; adjusted operating profit increased 27 percent to $438 million Operating margin increased 90 basis points to 20.1 percent; adjusted operating margin increased 60 basis points to 20.1 percent (Loss) per share from continuing operations was $(0.14) per share due to the settlement of domestic qualified defined-benefit pension plans; adjusted earnings per share from continuing operations increased 34 percent to $1.14 per share Repurchased 6.6 million shares for $447 million Raising 2021 earnings per share guidance; anticipate 2021 earnings per share in the range of $1.74 - $1.84, and on an adjusted earnings per share basis, in the range of $3.65 - $3.75, an increase from the previous range of $3.50 - $3.70

Masco Corporation /zigman2/quotes/202412472/composite MAS -0.21% , one of the world’s leading manufacturers of branded home improvement and building products, reported its second quarter results.

“Our business performed exceptionally well during the second quarter, demonstrating the strength, diversification and resilience of our business,” said Masco President and CEO, Keith Allman. “We delivered our fourth consecutive quarter of double-digit sales growth, and our sixth consecutive quarter of adjusted margin expansion and double-digit adjusted earnings per share growth. We also continued our capital deployment strategy and leveraged our strong free cash flow by returning $507 million to shareholders through dividends and share repurchases during the quarter. Finally, we further improved our balance sheet and reduced future cash contributions by settling our domestic qualified defined-benefit pension plans during the quarter.”

2021 Second Quarter Commentary

  • On a reported basis, compared to second quarter 2020:

  • Compared to second quarter 2020, 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:

  • Liquidity as of June 30, 2021 was $1,769 million (including availability under our revolving credit facility)

  • Plumbing Products’ net sales increased 53 percent; in local currency and excluding acquisitions and divestitures, sales increased 44 percent

  • Decorative Architectural Products’ net sales decreased five percent; in local currency and excluding acquisitions, sales decreased seven percent

“We continue to see robust demand for our products across our end markets,” stated Allman. “We are effectively managing supply chain tightness and escalating logistics inflation to deliver value for our customers and our shareholders. Based on our strong performance for the first half of 2021 and continued strong demand in our international business and trade channel, we now anticipate earnings per share to be in the range of $3.65 to $3.75 per share, increased from our previous expectation of $3.50 to $3.70 per share,” concluded Allman.

Dividend Declaration

Masco’s Board of Directors declared a quarterly dividend of $0.235 per common share, payable on August 30, 2021, to shareholders of record on August 13, 2021.

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; 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 second quarter 2021 supplemental material, including a presentation in PDF format, is available on Masco’s website at www.masco.com .

Conference Call Detail

A conference call regarding items contained in this release is scheduled for Thursday, July 29, 2021 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 8935219. 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 8935219. The telephone replay will be available approximately two hours after the end of the call and continue through August 29, 2021.

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 to a lesser extent, new home construction, our ability to maintain our strong brands and reputation and to develop innovative products, our ability to maintain our competitive position in our industries, our reliance on key customers, the length and severity of the ongoing COVID-19 pandemic, including its impact on domestic and international economic activity, consumer confidence, our production capabilities, our employees and our supply chain; the cost and availability of materials and the imposition of tariffs, our dependence on third-party suppliers, risks associated with our 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 and diverse 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.

MASCO CORPORATION
(in millions, except per common share data)
 
  Three Months Ended June 30,   Six Months Ended June 30,
  2021   2020   2021   2020
Net sales $ 2,179     $ 1,764     $ 4,149     $ 3,345  
Cost of sales 1,388     1,136     2,658     2,170  
Gross profit 791     628     1,491     1,175  
               
Selling, general and administrative expenses 354     289     689     611  
Operating profit 437     339     802     564  
               
Other income (expense), net:              
Interest expense (25 )   (35 )   (227 )   (70 )
Other, net (415 )   (2 )   (421 )   (18 )
  (440 )   (37 )   (648 )   (88 )
(Loss) income from continuing operations before income taxes (3 )   302     154     476  
               
Income tax expense 12     82     55     115  
(Loss) income from continuing operations (15 )   220     99     361  
               
Income from discontinued operations, net     14         411  
Net (loss) income (15 )   234     99     772  
               
Less: Net income attributable to noncontrolling interest 21     10     41     18  
Net (loss) income attributable to Masco Corporation $ (36 )   $ 224     $ 58     $ 754  
               
(Loss) income per common share attributable to Masco Corporation (diluted):              
(Loss) income from continuing operations $ (0.14 )   $ 0.80     $ 0.20     $ 1.27  
Income from discontinued operations, net     0.05         1.53  
Net (loss) income $ (0.14 )   $ 0.85     $ 0.20     $ 2.80  
               
Average diluted common shares outstanding 252     263     256     268  
               
Amounts attributable to Masco Corporation:              
(Loss) income from continuing operations $ (36 )   $ 210     $ 58     $ 343  
Income from discontinued operations, net     14         411  
Net (loss) income attributable to Masco Corporation $ (36 )   $ 224     $ 58     $ 754  
 
Historical information is available on our website.
MASCO CORPORATION
(dollars in millions)
 
  Three Months Ended June 30,   Six Months Ended June 30,
  2021   2020   2021   2020
Gross Profit, Selling, General and Administrative Expenses, and Operating Profit Reconciliations              
               
Net sales $ 2,179     $ 1,764     $ 4,149     $ 3,345  
               
Gross profit, as reported $ 791     $ 628     $ 1,491     $ 1,175  
Rationalization charges 1     3     2     6  
Gross profit, as adjusted $ 792     $ 631     $ 1,493     $ 1,181  
               
Gross margin, as reported 36.3 %   35.6 %   35.9 %   35.1 %
Gross margin, as adjusted 36.3 %   35.8 %   36.0 %   35.3 %
               
Selling, general and administrative expenses, as reported $ 354     $ 289     $ 689     $ 611  
Rationalization charges     2         2  
Selling, general and administrative expenses, as adjusted $ 354     $ 287     $ 689     $ 609  
               
Selling, general and administrative expenses as percent of net sales, as reported 16.2 %   16.4 %   16.6 %   18.3 %
Selling, general and administrative expenses as percent of net sales, as adjusted 16.2 %   16.3 %   16.6 %   18.2 %
               
Operating profit, as reported $ 437     $ 339     $ 802     $ 564  
Rationalization charges 1     5     2     8  
Operating profit, as adjusted $ 438     $ 344     $ 804     $ 572  
               
Operating margin, as reported 20.1 %   19.2 %   19.3 %   16.9 %
Operating margin, as adjusted 20.1 %   19.5 %   19.4 %   17.1 %
 
Historical information is available on our website.
MASCO CORPORATION
(in millions, except per common share data)
 
  Three Months Ended June 30,   Six Months Ended June 30,
  2021   2020   2021   2020
Income Per Common Share Reconciliations              
               
(Loss) income from continuing operations before income taxes, as reported $ (3 )   $ 302     $ 154     $ 476  
Rationalization charges 1     5     2     8  
Pension costs associated with terminated plans 413     5     422     11  
Loss on sale of business 18         18      
(Gain) on preferred stock redemption (14 )       (14 )    
(Earnings) from equity investments, net         (2 )    
Loss on extinguishment of debt         168      
Income from continuing operations before income taxes, as adjusted 415     312     748     495  
Tax at 25% rate (104 )   (78 )   (187 )   (124 )
Less: Net income attributable to noncontrolling interest 21     10     41     18  
Income from continuing operations, as adjusted $ 290     $ 224     $ 520     $ 353  
               
Income from continuing operations per common share, as adjusted $ 1.14     $ 0.85     $ 2.03     $ 1.32  
               
Average diluted common shares outstanding, as reported 252     263     256     268  
Stock option dilution (1) 2              
Average diluted common shares outstanding, as adjusted 254     263     256     268  
(1) For the three months ended June 30, 2021, 2 million of stock option dilution was included in the average diluted common shares outstanding, as adjusted to reflect what the average diluted common shares outstanding would have been if there was income from continuing operations, as reported.
Outlook for the Twelve Months Ended December 31, 2021
 
  Twelve Months Ended December 31, 2021
  Low End   High End
Income Per Common Share Outlook      
       
Income from continuing operations per common share $ 1.74     $ 1.84  
Rationalization charges 0.02     0.02  
Pension costs associated with terminated plans (1) 1.32     1.32  
Loss on sale of business 0.05     0.05  
(Gain) on preferred stock redemption (0.04 )   (0.04 )
Loss on extinguishment of debt 0.53     0.53  
Allocation to participating securities per share (2) 0.03     0.03  
Income from continuing operations per common share, as adjusted $ 3.65     $ 3.75  
(1) Represents costs associated with our qualified domestic defined-benefit pension plans that were settled in the second quarter of 2021.
(2) Represents the impact of distributed dividends and undistributed earnings to unvested restricted stock awards as well as an allocation to redeemable noncontrolling interest in accordance with the two-class method of calculating earnings per share.
Historical information is available on our website.
MASCO CORPORATION
(dollars in millions)
 
  June 30, 2021   December 31, 2020
Balance Sheet      
Assets      
Current Assets:      
Cash and cash investments $ 769   $ 1,326
Receivables 1,352   1,138
Prepaid expenses and other 117   149
Inventories 1,021   876
Total Current Assets 3,259   3,489
       
Property and equipment, net 896   908
Operating lease right-of-use assets 169   166
Goodwill 592   563
Other intangible assets, net 372   357
Other assets 135   294
Total Assets $ 5,423   $ 5,777
       
Liabilities      
Current Liabilities:      
Accounts payable $ 1,021   $ 893
Notes payable 10   3
Accrued liabilities 747   1,038
Total Current Liabilities 1,778   1,934
       
Long-term debt 2,950   2,792
Noncurrent operating lease liabilities 152   149
Other liabilities 458   481
Total Liabilities 5,338   5,356
       
Redeemable noncontrolling interest 25  
       
Equity 60   421
Total Liabilities and Equity $ 5,423   $ 5,777
  As of June 30,
  2021   2020
Other Financial Data      
Working Capital Days      
Receivable days 53     58  
Inventory days 77     66  
Payable days 69     74  
Working capital $ 1,352     $ 1,213  
Working capital as a % of sales (LTM) (1) 16.9 %   18.1 %
(1) Working capital as a % of sales as of June 30, 2021, excluding acquisitions made in the first quarter of 2021 and the fourth quarter of 2020, was 16.5%.
Historical information is available on our website.
MASCO CORPORATION
(dollars in millions)
 
  Six Months Ended June 30,
  2021   2020
Cash Flows From (For) Operating Activities:      
Cash provided by operating activities $ 610     $ 283  
Working capital changes (371 )   7  
Net cash from operating activities 239     290  
       
Cash Flows From (For) Financing Activities:      
Retirement of notes (1,326 )    
Purchase of Company common stock (750 )   (602 )
Cash dividends paid (96 )   (73 )
Dividends paid to noncontrolling interest (43 )   (23 )
Issuance of notes, net of issuance costs 1,481      
Debt extinguishment costs (160 )    
Proceeds from the exercise of stock options 1     21  
Employee withholding taxes paid on stock-based compensation (14 )   (22 )
(Decrease) increase in debt, net (2 )   5  
Net cash for financing activities (909 )   (694 )
       
Cash Flows From (For) Investing Activities:      
Capital expenditures (53 )   (45 )
Acquisition of businesses, net of cash acquired (1 )   (24 )
Proceeds from disposition of businesses, net of cash disposed 5     865  
Proceeds from disposition of other financial investments 168     1  
Other, net 3     2  
Net cash from investing activities 122     799  
       
Effect of exchange rate changes on cash and cash investments (9 )   (3 )
       
Cash and Cash Investments:      
(Decrease) increase for the period (557 )   392  
At January 1 1,326     697  
At June 30 $ 769     $ 1,089  
  As of June 30,
  2021   2020
Liquidity      
Cash and cash investments $ 769     $ 1,089  
Revolver availability 1,000     1,000  
Total Liquidity $ 1,769     $ 2,089  
 
Historical information is available on our website.
MASCO CORPORATION
(dollars in millions)
 
  Three Months Ended June 30,       Six Months Ended June 30,    
  2021   2020   Change   2021   2020   Change
Plumbing Products                      
Net sales $ 1,329     $ 868     53 %   $ 2,578     $ 1,823     41 %
                       
Operating profit, as reported $ 273     $ 155         $ 525     $ 312      
Operating margin, as reported 20.5 %   17.9 %       20.4 %   17.1 %    
                       
Rationalization charges 1     3         2     5      
Accelerated depreciation related to rationalization activity     1             1      
Operating profit, as adjusted 274     159         527     318      
Operating margin, as adjusted 20.6 %   18.3 %       20.4 %   17.4 %    
                       
Depreciation and amortization 24     20         50     40      
EBITDA, as adjusted $ 298     $ 179         $ 577     $ 358      
                       
Decorative Architectural Products                      
Net sales $ 850     $ 896     (5 )%   $ 1,571     $ 1,522     3 %
                       
Operating profit, as reported $ 188     $ 201         $ 330     $ 296      
Operating margin, as reported 22.1 %   22.4 %       21.0 %   19.4 %    
                       
Rationalization charges     1             2      
Operating profit, as adjusted 188     202         330     298      
Operating margin, as adjusted 22.1 %   22.5 %       21.0 %   19.6 %    
                       
Depreciation and amortization 9     10         19     21      
EBITDA, as adjusted $ 197     $ 212         $ 349     $ 319      
                       
Total                      
Net sales $ 2,179     $ 1,764     24 %   $ 4,149     $ 3,345     24 %
                       
Operating profit, as reported - segment $ 461     $ 356         $ 855     $ 608      
General corporate expense, net (24 )   (17 )       (53 )   (44 )    
Operating profit, as reported 437     339         802     564      
Operating margin, as reported 20.1 %   19.2 %       19.3 %   16.9 %    
                       
Rationalization charges - segment 1     4         2     7      
Accelerated depreciation related to rationalization activity - segment     1             1      
Operating profit, as adjusted 438     344         804     572      
Operating margin, as adjusted 20.1 %   19.5 %       19.4 %   17.1 %    
                       
Depreciation and amortization - segment 33     30         69     61      
Depreciation and amortization - non-operating 2     2         9     4      
EBITDA, as adjusted $ 473     $ 376         $ 882     $ 637      
 
Historical information is available on our website.
MASCO CORPORATION
(dollars in millions)
 
  Three Months Ended June 30,       Six Months Ended June 30,    
  2021   2020   Change   2021   2020   Change
North American                      
Net sales $ 1,717     $ 1,480     16 %   $ 3,246     $ 2,738     19 %
                       
Operating profit, as reported $ 370     $ 321         $ 678     $ 531      
Operating margin, as reported 21.5 %   21.7 %       20.9 %   19.4 %    
                       
Rationalization charges 1     4         2     7      
Accelerated depreciation related to rationalization activity     1             1      
Operating profit, as adjusted 371     326         680     539      
Operating margin, as adjusted 21.6 %   22.0 %       20.9 %   19.7 %    
                       
Depreciation and amortization 21     19         44     39      
EBITDA, as adjusted $ 392     $ 345         $ 724     $ 578      
                       
International                      
Net sales $ 462     $ 284     63 %   $ 903     $ 607     49 %
                       
Operating profit, as reported $ 91     $ 35         $ 177     $ 77      
Operating margin, as reported 19.7 %   12.3 %       19.6 %   12.7 %    
                       
Depreciation and amortization 12     11         25     22      
EBITDA $ 103     $ 46         $ 202     $ 99      
                       
Total                      
Net sales $ 2,179     $ 1,764     24 %   $ 4,149     $ 3,345     24 %
                       
Operating profit, as reported - segment $ 461     $ 356         $ 855     $ 608      
General corporate expense, net (24 )   (17 )       (53 )   (44 )    
Operating profit, as reported 437     339         802     564      
Operating margin, as reported 20.1 %   19.2 %       19.3 %   16.9 %    
                       
Rationalization charges - segment 1     4         2     7      
Accelerated depreciation related to rationalization activity     1             1      
Operating profit, as adjusted 438     344         804     572      
Operating margin, as adjusted 20.1 %   19.5 %       19.4 %   17.1 %    
                       
Depreciation and amortization - segment 33     30         69     61      
Depreciation and amortization - non-operating 2     2         9     4      
EBITDA, as adjusted $ 473     $ 376         $ 882     $ 637      
 
Historical information is available on our website.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20210729005101/en/

SOURCE: Masco Corporation

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

COMTEX_390601964/2456/2021-07-29T07:00:20

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/zigman2/quotes/202412472/composite
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$ 61.01
-0.13 -0.21%
Volume: 2.26M
Oct. 22, 2021 4:03p
P/E Ratio
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Dividend Yield
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Market Cap
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Rev. per Employee
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