Taylor, MI - Masco Corporation today reported that net sales for the first quarter ended March 31, 2011 decreased four percent, to $1.8 billion, compared to the first quarter of 2010. North American sales decreased seven percent and International sales increased four percent. In local currencies, International sales increased five percent compared with the first quarter of 2010.
(Loss) income was $(.05) per common share and $.03 per common share for the first quarters of 2011 and 2010, respectively, excluding the items in Exhibit A and with a normalized tax rate of 36 percent. Including these items, loss, as reported was $(.13) per common share and $(.02) per common share for the first quarters ended March 31, 2011 and 2010, respectively.
"As anticipated, the trends impacting our business, including depressed new home construction, the deferral of "big ticket" repair and remodel activity and commodity cost pressures have continued into 2011. In the first quarter of 2011, our sales were down four percent. Excluding cabinet products that we are exiting, as previously announced, our sales would have been down just one percent compared to a relatively strong first quarter of 2010, which benefited from the homebuyer tax credit that expired in mid-2010. In addition, on that same basis, sales in February and March of 2011 were basically flat with 2010. Plumbing Products sales were strong in first quarter of 2011 compared to last year and we believe that our North American cabinet business and our installation business, while still depressed, were able to gain share sequentially, compared to fourth quarter of 2010. We continue to manage our cost structure aggressively across our business and we anticipate that actions we have taken, or expect to take, to drive productivity, cost reductions, supply chain efficiencies and price increases will offset the impact of commodity and energy cost increases and other cost inflations for full-year 2011," said Masco's CEO Tim Wadhams.
Loss for the three months ended March 31, 2011 included gains of $17 million pre-tax related to the sale of financial investments.
We continue to focus on the rationalization of our businesses, including business consolidations, plant closures, headcount reductions, system implementations and other initiatives. During the first quarters of 2011 and 2010, we incurred costs and charges of $32 million pre-tax ($.06 per common share, after tax) and $14 million pre-tax ($.03 per common share, after tax), respectively, related to these initiatives.
"While we still believe that the second half of 2011 will be stronger than the first half, our enthusiasm has been tempered somewhat. Job growth has been modest at best, energy costs have increased, reflecting the turmoil in the Middle East and most economists have reduced their forecasts for 2011, including for housing starts. Given the uncertainty of the timing and strength of the recovery in our markets, we will continue to focus on the things we can control to improve our execution and strengthen our brands. The Masco Business System continues to drive positive change across the Company. Our cabinet integration is on plan and we expect will drive fixed cost reductions and share gains; we have strengthened our brands and our focus on innovation is driving exciting new opportunities across all of our product groups, and we have added outstanding talent to our leadership teams to enhance the development and execution of our business strategies," said Tim Wadhams.
Longer-term, we are confident about the fundamentals for the new home construction and home improvement markets and we are optimistic about the future. We expect that improvements in our markets and in consumer spending, together with the changes we are driving across Masco and our financial strength will create significant value for our shareholders.
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 2011 first quarter supplemental material, including a presentation in PDF format, will be distributed after the market closes on April 25, 2011 and will be available on the Company's Web site.
A conference call regarding items contained in this release is scheduled for Tuesday, April 26, 2011 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 (913) 312-9335 (confirmation #1737120). The conference call will be webcast simultaneously on the Company's Web site and supplemental material, including the financial data referred to on the call and a reconciliation of non-GAAP information provided on the call, will also be available on the Web site.
A replay of the call will be available on Masco's Web site or by phone by dialing (719) 457-0820 (replay access code #1737120) approximately two hours after the end of the call and will continue through May 3, 2011.
Masco Corporation's press releases and other information are available through the Company's toll free number, or under the Investor Relations section of Masco's Web site.
SOURCE: Masco Corp.
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