Taylor, MI — Masco Corporation (NYSE: MAS) continued its trend of delivering growth in the second quarter of 2013. All operating segments contributed to both top and bottom line growth, accelerated by the strength of new home construction in North America and the successful execution of new product and program introductions at retail. Adjusted operating margins increased to 9.6 percent from 6.7 percent due to higher volumes and increased operating leverage.
Key Quarter Highlights
• Sales increased 10 percent to $2.1 billion
• North American sales increased 11 percent
• Growth driven by new home construction and new products and programs at retail
• Adjusted operating profit margin expanded 290 bps to 9.6 percent
• All segments positively contributed to top and bottom line growth
2013 Second Quarter Commentary
• Net sales from continuing operations increased 10 percent to $2.1 billion, compared with $1.9 billion for second quarter 2012. North American sales increased 11 percent and international sales increased 7 percent in U.S. dollars and 6 percent in local currency
• Compared to second quarter 2012, 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 of 28.9 percent increased 200 bps
• Operating margins were 9.6 percent compared to 6.7 percent
• Income from continuing operations was $0.23 per common share compared to $0.11 per common share
• Income/(loss) from continuing operations, as reported, was $0.23 per common share compared to ($0.15) per common share in the second quarter of 2012
• We ended the second quarter with approximately $1.2 billion of cash
2013 Second Quarter Operating Segment Highlights
• Plumbing Products benefited from a North American faucet and toilet sales growth percentage in the mid-teens
• Decorative Architectural Products drove sales growth through new product introductions and the continued success of programs with retail partners
• Cabinets and Related Products achieved profitability by remaining focused on turnaround efforts
• Installation and Other Services delivered profitable growth, benefiting from the strength of new home construction
• Other Specialty Products accelerated top and bottom line growth led by North American window sales, which increased approximately 20 percent
“We are very pleased with our second quarter 2013 results, certainly one of the strongest quarters since the downturn and a continuation of the momentum which started for us in the fourth quarter of 2012,” said Masco’s President and CEO, Tim Wadhams. “Top and bottom line growth was delivered by each of our segments in the second quarter against a backdrop of continued growth in North American new home construction and new product introductions. Continuing our trend, we introduced new products in our Decorative Architectural segment and benefited from the growth of previously introduced new products and programs at retail. Our Cabinet and Installation segments further improved their performance by achieving profitability and we remain focused on driving profitable growth in our North American cabinetry business. In addition, we were pleased with our international sales growth, given the weakness in European economies. Our strong performance reflects our ongoing success in leveraging the housing recovery and the continued execution of our strategic priorities, including our focus on cost containment.”
“We believe that new home construction will continue to show strong growth in 2013 and we are encouraged by the improvement in repair and remodeling trends. While this growth is promising, uncertainties related to the overall strength of the U. S. economy and the lingering weakness in the Eurozone persists. Given that, we remain focused on navigating successfully through this recovery. We continue to believe that the actions we have taken over the past several years, including investing in our brands, reducing our cost structure and paying down debt, have strengthened our business for the future,” said Mr. Wadhams.
Headquartered in Taylor, Michigan, Masco Corporation is one of the world’s leading manufacturers of home improvement and building products, as well as a leading provider of services that include the installation of insulation and other building products.
The 2013 second quarter supplemental material, including a presentation in PDF format, is available on the Company’s website at www.masco.com.
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