Masco Corporation Highlights:
Second Quarter 2005
* Net sales from continuing operations increased nine percent to a record
$3.3 billion.
* Income from continuing operations was $274 million or $.64 per common
share.
* The Company returned $229 million to shareholders through share
repurchases and dividends.
* The Company issued $500 million of fixed-rate 4.80% notes due 2015 and
had over $1.6 billion in cash and marketable securities at June 30,
2005.
TAYLOR, Mich., Aug. 2 /PRNewswire-FirstCall/ -- Masco Corporation
(NYSE: MAS) today reported that net sales from continuing operations for the
quarter ended June 30, 2005 increased nine percent to a record $3.3 billion
compared with $3.1 billion for the second quarter of 2004.
Income from continuing operations for the second quarter of 2005 was $274
million or $.64 per common share compared with $294 million or $.65 per common
share for the comparable period of 2004. Results for the second quarter of
2005 benefited from other income, principally net gains from financial
investments, of $.04 per common share, partially offset by realized currency
transaction losses of $.02 per common share. The second quarter of 2004
benefited from $.03 per common share of other income, principally net gains
from financial investments and other non-operating assets, as well as $.01 per
common share of income related to insurance proceeds from the Behr litigation
settlement and $.01 per common share of realized currency transaction gains.
The Company's 2005 first half results were adversely affected by increases
in commodity, energy and freight costs, which have not been totally recovered
due, in part, to the lag in implementing selling price increases to customers,
as well as product mix. Second quarter 2005 sales and earnings, however, were
better-than-expected due to the strong new construction market as well as an
improvement in Key Retailer Sales.
The Company previously announced, in the first quarter of 2004, the
planned disposition of several European businesses that are not core to the
Company's long-term growth strategy. Net income for the second quarter of 2005
did not include any net income (loss) related to discontinued operations,
since the Company completed the disposition process in the first quarter of
2005. The second quarter of 2004 results include after-tax income from
discontinued operations of $11 million, and an additional after-tax charge
aggregating $44 million ($.10 per common share) for those businesses that were
expected to be divested at a loss, both of which are included in discontinued
operations. Including the operating results of these discontinued operations
and the charge for certain of these businesses, net income for the 2004 second
quarter was $261 million or $.58 per common share.
The Company is committed to its strategy of value creation and continues
to be focused on the simplification of its business model, cash flow
generation, improvement in return on invested capital and the return of cash
to shareholders through share repurchases and dividends.
Consistent with this strategy, the Company is pursuing a variety of
initiatives to offset cost increases and increase operating profit including
sourcing programs, the restructuring of certain of its businesses (including
consolidations), manufacturing rationalization, headcount reductions and other
profit improvement programs. As previously disclosed, the Company believes
these initiatives will reduce annual costs by $200 million by the end of 2007.
Costs and charges related to the acceleration of these profit improvement
programs, when combined with recent additional energy-related and commodity
cost increases and the adverse effect of changes in currency values, are
expected to result in the Company's full-year 2005 earnings from continuing
operations being closer to $2.30 per common share than the previous guidance
of approximately $2.40 per common share. Implementing these initiatives
should improve the Company's earnings outlook for 2006 and beyond.
Based on current business trends, the Company anticipates that third
quarter 2005 earnings from continuing operations will be in the range of $.60
to $.64 per common share compared with third quarter 2004 earnings from
continuing operations of $.64 per common share.
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.
A conference call regarding items contained in this release is scheduled
for Tuesday, August 2, 2005 at 11:00 a.m. ET. Participants in the call are
asked to register five to ten minutes prior to the scheduled start time by
dialing (719) 457-2692 (confirmation #4876876). The conference call will be
webcast simultaneously on the Company's website at http://www.masco.com and
supplemental material, including the financial data referred to on the call
and a reconciliation of all non-GAAP information provided on the call, will
also be available on the website. A replay of the call will be available on
Masco's website or by phone by dialing (719) 457-0820 (replay access code
#4876876) approximately two hours after the end of the call and will continue
through August 9, 2005.
Masco Corporation's press releases and other information are available
through the Company's toll free number, 1-888-MAS-NEWS, or under the Investor
Relations section of Masco's website at http://www.masco.com.
Statements contained herein may include certain forward-looking statements
regarding Masco's future sales, earnings growth potential and other
developments. Actual results may vary materially because of external factors
such as interest rate fluctuations, changes in consumer spending and other
factors over which management has no control. The Company believes that
certain non-GAAP performance measures and ratios, used in managing the
business, may provide users of this financial information with additional
meaningful comparisons between current results and results in prior periods.
Non-GAAP performance measures and ratios should be viewed in addition to, and
not as an alternative for, the Company's reported results under accounting
principles generally accepted in the United States. Additional information
about the Company's products, markets and conditions, which could affect the
Company's future performance, is contained in the Company's filings with the
Securities and Exchange Commission and is available on Masco's website at
http://www.masco.com. Masco undertakes no obligation to update any forward-looking
statements, whether as a result of new information, future events or
otherwise.
MASCO CORPORATION
CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE MONTHS AND SIX MONTHS ENDED
JUNE 30, 2005 AND JUNE 30, 2004
(in millions except
per common share data)
Three Months Ended Six Months Ended
June 30, June 30,
2005 2004 2005 2004
Net Sales $3,348 $3,061 $6,317 $5,867
Cost of Sales 2,363 2,087 4,491 4,042
Gross Profit 985 974 1,826 1,825
Selling, General and
Administrative Expenses 515 504 1,015 989
(Income) Regarding
Litigation Settlement (3) (7) (5) (28)
Operating Profit 473 477 816 864
Other Income (Expense), Net (41) (11) (63) (12)
Income from Continuing
Operations before Income
Taxes and Minority
Interest 432 466 753 852
Income Taxes 153 167 257 307
Income from Continuing
Operations before Minority
Interest 279 299 496 545
Minority Interest 5 5 10 10
Income from Continuing
Operations 274 294 486 535
Income (Loss) from
Discontinued Operations,
Net of Income Taxes - (33) 19 (106)
Net Income $ 274 $ 261 $ 505 $ 429
Earnings per Common Share (Diluted):
Income from Continuing
Operations $0.64 $0.65 $1.11 $1.16
Income (Loss) from
Discontinued Operations,
Net of Income Taxes - (0.07) 0.04 (0.23)
Net Income $0.64 $0.58 $1.16 $0.93
Average Diluted Common
Shares Outstanding 430 453 437 460
SOURCE Masco Corporation
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Related links:
http://www.masco.com
Company News On-Call:
http://www.prnewswire.com/comp/535350.html
CONTACT:
Maria Duey, +1-313-792-5500, for Masco
Corporation
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