TAYLOR, MI - Cabinetry giant Masco Corp. has made a $75 settlement in an eight-year class action suit by 369 contractors. The parent of Merillat and KraftMaid (NYSE: MAS) reported second quarter sales of $2 billion, essentially flat (up about $6 million) against second quarter 2011.
The period saw a loss of $75 million for the maker of cabinets (including Merillat and KraftMaid), countertops, finishes, windows, doors and plumbing. North American sales increased 3 percent, while international sales, which saw volumes rise, fell 9 percent as a result of currency exchange rates.
Masco lost (with four other firms also parties to the litigation) an eight-year-long class action suit by 369 building conractors who charged it had colluded to fix prices in installed insulation. Masco is the largest installer of insulation in the U.S.
The settlement, reached in Atlanta Federal court after the the quarter ended, and to be finalized August 17, will result in a $75 million charge to the second quarter, equal to the reported loss.
"Our Installation and Cabinet segments improved their performance by approximately $20 million in operating profit, in aggregate, compared to second quarter 2011, and for the first half of 2012, these segments achieved over $45 million of operating profit improvement,” said CEO Tim Wadhams in announcing the results. “We expect both segments to benefit in the second half of 2012 from the continued improvement in North America new home construction activity."
“Our top line benefitted from increased new home construction activity," Wadhams said. In mid-July Masco repaid $745 million debt maturity, leaving it with $1.2 billion cash.
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