Taylor, MI — Masco Corporation (NYSE: MAS) continued to deliver steady growth in the first quarter of 2013. Top line growth was fueled by the strength of new home construction in North America and the successful execution of new product and program introductions. Adjusted operating margins increased from 6.5 to 7.5 percent due to higher volumes and our continued commitment to cost control. In our Cabinet segment, adjusted operating margin performance improved to a break-even level of profitability. We also successfully entered into a new five year $1.25 billion unsecured revolving credit agreement.
• Sales increased 4 percent to $1.9 billion
• North American sales increased 6 percent
• Growth driven by new home construction and new products and programs
• Adjusted operating profit increased 19 percent
• Cabinet segment’s adjusted operating profit improved to break-even
2013 First Quarter Commentary
• Net sales from continuing operations increased 4 percent to $1.9 billion, compared with $1.8 billion for first quarter 2012. North American sales increased 6 percent and international sales decreased 2 percent, in U.S. dollars and local currency
• Compared to first 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 27.4 percent were unchanged
• Operating margins improved to 7.5 percent compared to 6.5 percent
• Income from continuing operations was $0.13 per common share compared to $0.07 per common share
• Income from continuing operations, as reported, was $0.16 per common share compared to $0.12 per common share in the first quarter of 2012
• We ended the first quarter with approximately $1 billion of cash
2013 First Quarter Operating Segment Highlights
• North American faucet and toilet business achieved sales growth percentage in the mid-teens
• Decorative Architectural Products’ margin expansion was driven by the anniversary of pricing actions and reduced program costs
• Cabinets and Related Products achieved break-even operating profit on an adjusted basis, with North American Cabinetry achieving profitability
• Installation and Other Services continued to benefit from new home construction growth
• Other Specialty Products’ net sales increased 8 percent, led by a strong performance from our North American window business
“We continued to benefit from strong growth in North American new home construction,” said Masco’s President and CEO, Tim Wadhams. “Despite a harsher winter this year in regions of North America and Europe, we improved our performance in the first quarter compared to 2012. The new products and programs we’ve introduced have exceeded our expectations and contributed to our steady growth. Our Cabinet segment is heading in the right direction, with adjusted operating performance achieving a break-even level of profitability. The successful execution of our strategic initiatives, including leveraging our brands, reducing our costs, improving our Installation and Cabinet segments and strengthening our balance sheet is reflected in our overall positive performance in the first quarter of 2013.”
“We continue to believe that new home construction will show strong growth in 2013, and repair and remodel activity will grow modestly, with big ticket items continuing to lag. While the continued weakness in the Eurozone remains a concern, we believe our ability to leverage the growth in new home construction, along with the actions we have taken over the past several years, including investing in our brands, reducing our cost structure and paying down debt, will continue to strengthen our business for the future,” said Mr. Wadhams.
Have something to say? Share your thoughts with us in the comments below.