LIVONIA, Mich.--(BUSINESS WIRE)--Masco Corporation (NYSE: MAS), one of the world’s leading manufacturers of branded home improvement and building products, reported its first quarter 2024 results.
2024 First Quarter Results
-
On a reported basis, compared to first quarter 2023:
-
Net sales decreased 3 percent to $1,926 million; in local currency and excluding acquisitions, net sales decreased 4 percent
- Plumbing Products’ net sales decreased 2 percent; in local currency and excluding acquisitions, net sales decreased 4 percent
- Decorative Architectural Products’ net sales decreased 3 percent
- In local currency, North American sales decreased 2 percent and international sales decreased 5 percent
- Gross margin increased 180 basis points to 35.6 percent from 33.8 percent
- Operating profit increased 1 percent to $318 million from $315 million
- Operating margin increased 60 basis points to 16.5 percent from 15.9 percent
- Net income increased to $0.97 per share, compared to $0.90 per share
-
Net sales decreased 3 percent to $1,926 million; in local currency and excluding acquisitions, net sales decreased 4 percent
-
Compared to first quarter 2023, results for key financial measures, as adjusted for certain items (see Exhibit A) and with a normalized tax rate of 24.5 percent, were as follows:
- Gross margin increased 210 basis points to 35.7 percent from 33.6 percent
- Operating profit increased 3 percent to $322 million from $312 million
- Operating margin increased 90 basis points to 16.7 percent from 15.8 percent
- Net income increased 8 percent to $0.93 per share, compared to $0.86 per share
- Liquidity at the end of the first quarter was $1,319 million (including availability under revolving credit facility)
“We delivered another quarter of strong results,” said Masco President and CEO, Keith Allman. “We expanded adjusted operating profit margin by 90 basis points and grew adjusted earnings per share by 8 percent through improved operational efficiencies and our continued focus on execution. Additionally, our balanced capital allocation strategy enabled us to return $212 million to shareholders through dividends and share repurchases during the quarter.”
“With the year beginning largely as expected, we continue to anticipate that 2024 adjusted earnings per share will be in the range of $4.00 to $4.25 per share,” said Allman. “Through our ongoing investments in our market leading brands, innovation, and service and our disciplined capital allocation strategy, we are confident in Masco’s ability to continue to deliver long-term shareholder value.”
About Masco
Headquartered in Livonia, Michigan, Masco Corporation is a global leader in the design, manufacture and distribution of branded home improvement and building products. Our portfolio of industry-leading brands includes Behr® paint; Delta® and hansgrohe® faucets, bath and shower fixtures; Kichler® decorative and outdoor lighting; Liberty® branded decorative and functional hardware; and HotSpring® spas. We leverage our powerful brands across product categories, sales channels and geographies to create value for our customers and shareholders. For more information about Masco Corporation, visit www.masco.com.
The 2024 first quarter supplemental material, including a presentation in PDF format, is available on the Company’s website at www.masco.com.
Conference Call Details
A conference call regarding items contained in this release is scheduled for Wednesday, April 24, 2024 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 888-259-6580 or 206-962-3782. Please use the conference identification number 73983883.
The conference call will be webcast simultaneously and in its entirety through the Company’s website. Shareholders, media representatives and others interested in Masco may participate in the webcast by registering through the Investor Relations section on the Company’s website.
A replay of the call will be available on Masco’s website or by phone by dialing 877-674-7070 or 416-764-8692. Please use the playback passcode 983883#. The telephone replay will be available approximately two hours after the end of the call and continue through May 23, 2024.
Safe Harbor Statement
This press release contains statements that reflect our views about our future performance and constitute “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as “outlook,” “believe,” “anticipate,” “appear,” “may,” “will,” “should,” “intend,” “plan,” “estimate,” “expect,” “assume,” “seek,” “forecast,” and similar references to future periods. Our views about future performance involve risks and uncertainties that are difficult to predict and, accordingly, our actual results may differ materially from the results discussed in our forward-looking statements. We caution you against relying on any of these forward-looking statements.
Our future performance may be affected by the levels of residential repair and remodel activity, and to a lesser extent, new home construction, our ability to maintain our strong brands, to develop innovative products and respond to changing consumer purchasing practices and preferences, our ability to maintain our public image and reputation, our ability to maintain our competitive position in our industries, our reliance on key customers, the cost and availability of materials, our dependence on suppliers and service providers, extreme weather events and changes in climate, risks associated with our international operations and global strategies, our ability to achieve the anticipated benefits of our strategic initiatives, our ability to successfully execute our acquisition strategy and integrate businesses that we have acquired and may in the future acquire, our ability to attract, develop and retain a talented and diverse workforce, risks associated with cybersecurity vulnerabilities, threats and attacks and risks associated with our reliance on information systems and technology. These and other factors are discussed in detail in Item 1A. "Risk Factors" in our most recent Annual Report on Form 10-K, as well as in our Quarterly Reports on Form 10-Q and in other filings we make with the Securities and Exchange Commission. Any forward-looking statement made by us speaks only as of the date on which it was made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. Unless required by law, we undertake no obligation to update publicly any forward-looking statements as a result of new information, future events or otherwise.
MASCO CORPORATION |
|||||||
Condensed Consolidated Statements of Operations - Unaudited |
|||||||
For the Three Months Ended March 31, 2024 and 2023 |
|||||||
(in millions, except per common share data) |
|||||||
|
Three Months Ended March 31, |
||||||
|
2024 |
|
2023 |
||||
Net sales |
$ |
1,926 |
|
|
$ |
1,979 |
|
Cost of sales |
|
1,241 |
|
|
|
1,310 |
|
Gross profit |
|
685 |
|
|
|
669 |
|
|
|
|
|
||||
Selling, general and administrative expenses |
|
367 |
|
|
|
354 |
|
Operating profit |
|
318 |
|
|
|
315 |
|
|
|
|
|
||||
Other income (expense), net: |
|
|
|
||||
Interest expense |
|
(25 |
) |
|
|
(28 |
) |
Other, net |
|
(5 |
) |
|
|
(2 |
) |
|
|
(30 |
) |
|
|
(30 |
) |
Income before income taxes |
|
289 |
|
|
|
285 |
|
|
|
|
|
||||
Income tax expense |
|
60 |
|
|
|
64 |
|
Net income |
|
229 |
|
|
|
221 |
|
|
|
|
|
||||
Less: Net income attributable to noncontrolling interest |
|
14 |
|
|
|
16 |
|
Net income attributable to Masco Corporation |
$ |
215 |
|
|
$ |
205 |
|
|
|
|
|
||||
Income per common share attributable to Masco Corporation (diluted): |
|
|
|
||||
Net income |
$ |
0.97 |
|
|
$ |
0.90 |
|
|
|
|
|
||||
Average diluted common shares outstanding |
|
221 |
|
|
|
227 |
|
Historical information is available on our website.
Amounts may not add due to rounding.
MASCO CORPORATION |
|||||||
Exhibit A: Reconciliations - Unaudited |
|||||||
For the Three Months Ended March 31, 2024 and 2023 |
|||||||
(dollars in millions) |
|||||||
|
Three Months Ended March 31, |
||||||
|
2024 |
|
2023 |
||||
Gross Profit, Selling, General and Administrative Expenses, and Operating Profit Reconciliations |
|
|
|
||||
|
|
|
|
||||
Net sales |
$ |
1,926 |
|
|
$ |
1,979 |
|
|
|
|
|
||||
Gross profit, as reported |
$ |
685 |
|
|
$ |
669 |
|
Rationalization charges (income) (1) |
|
3 |
|
|
|
(4 |
) |
Gross profit, as adjusted |
$ |
688 |
|
|
$ |
665 |
|
|
|
|
|
||||
Gross margin, as reported |
|
35.6 |
% |
|
|
33.8 |
% |
Gross margin, as adjusted |
|
35.7 |
% |
|
|
33.6 |
% |
|
|
|
|
||||
Selling, general and administrative expenses, as reported |
$ |
367 |
|
|
$ |
354 |
|
Rationalization charges |
|
— |
|
|
|
1 |
|
Selling, general and administrative expenses, as adjusted |
$ |
367 |
|
|
$ |
353 |
|
|
|
|
|
||||
Selling, general and administrative expenses as percent of net sales, as reported |
|
19.1 |
% |
|
|
17.9 |
% |
Selling, general and administrative expenses as percent of net sales, as adjusted |
|
19.1 |
% |
|
|
17.8 |
% |
|
|
|
|
||||
Operating profit, as reported |
$ |
318 |
|
|
$ |
315 |
|
Rationalization charges (income) (1) |
|
3 |
|
|
|
(3 |
) |
Operating profit, as adjusted |
$ |
322 |
|
|
$ |
312 |
|
|
|
|
|
||||
Operating margin, as reported |
|
16.5 |
% |
|
|
15.9 |
% |
Operating margin, as adjusted |
|
16.7 |
% |
|
|
15.8 |
% |
| (1) | Represents income for the three months ended March 31, 2023 due to the sale of excess and obsolete inventory that was related to a rationalization activity, partially offset by rationalization charges. |
Historical information is available on our website.
Amounts may not add due to rounding.
MASCO CORPORATION |
|||||||
Exhibit A: Reconciliations - Unaudited |
|||||||
For the Three Months Ended March 31, 2024 and 2023 |
|||||||
(in millions, except per common share data) |
|||||||
|
Three Months Ended March 31, |
||||||
|
2024 |
|
2023 |
||||
Income Per Common Share Reconciliations |
|
|
|
||||
|
|
|
|
||||
Income before income taxes, as reported |
$ |
289 |
|
|
$ |
285 |
|
Rationalization charges (income) (1) |
|
3 |
|
|
|
(3 |
) |
Realized (gains) from private equity funds |
|
— |
|
|
|
(1 |
) |
Income before income taxes, as adjusted |
|
292 |
|
|
|
281 |
|
Tax at 24.5% rate |
|
(72 |
) |
|
|
(69 |
) |
Less: Net income attributable to noncontrolling interest |
|
14 |
|
|
|
16 |
|
Net income, as adjusted |
$ |
206 |
|
|
$ |
196 |
|
|
|
|
|
||||
Net income per common share, as adjusted |
$ |
0.93 |
|
|
$ |
0.86 |
|
|
|
|
|
||||
Average diluted common shares outstanding |
|
221 |
|
|
|
227 |
|
| (1) | Represents income for the three months ended March 31, 2023 due to the sale of excess and obsolete inventory that was related to a rationalization activity, partially offset by rationalization charges. |
Outlook for the Year Ended December 31, 2024 |
|||||
|
Year Ended December 31, 2024 |
||||
|
Low End |
|
High End |
||
Income Per Common Share Reconciliation |
|
|
|
||
|
|
|
|
||
Net income per common share |
$ |
4.00 |
|
$ |
4.25 |
Rationalization charges |
|
— |
|
|
— |
Net income per common share, as adjusted |
$ |
4.00 |
|
$ |
4.25 |
Historical information is available on our website.
Amounts may not add due to rounding.
MASCO CORPORATION |
||||||
Condensed Consolidated Balance Sheets and Other Financial Data - Unaudited |
||||||
March 31, 2024 and December 31, 2023 |
||||||
(dollars in millions) |
||||||
|
|
March 31, 2024 |
|
December 31, 2023 |
||
Balance Sheet |
|
|
|
|
||
Assets |
|
|
|
|
||
Current assets: |
|
|
|
|
||
Cash and cash investments |
|
$ |
368 |
|
$ |
634 |
Receivables |
|
|
1,310 |
|
|
1,090 |
Inventories |
|
|
1,059 |
|
|
1,022 |
Prepaid expenses and other |
|
|
112 |
|
|
110 |
Total current assets |
|
|
2,850 |
|
|
2,856 |
|
|
|
|
|
||
Property and equipment, net |
|
|
1,111 |
|
|
1,121 |
Goodwill |
|
|
598 |
|
|
604 |
Other intangible assets, net |
|
|
367 |
|
|
377 |
Operating lease right-of-use assets |
|
|
262 |
|
|
268 |
Other assets |
|
|
148 |
|
|
139 |
Total assets |
|
$ |
5,336 |
|
$ |
5,363 |
|
|
|
|
|
||
Liabilities |
|
|
|
|
||
Current liabilities: |
|
|
|
|
||
Accounts payable |
|
$ |
899 |
|
$ |
840 |
Notes payable |
|
|
52 |
|
|
3 |
Accrued liabilities |
|
|
690 |
|
|
852 |
Total current liabilities |
|
|
1,641 |
|
|
1,695 |
|
|
|
|
|
||
Long-term debt |
|
|
2,945 |
|
|
2,945 |
Noncurrent operating lease liabilities |
|
|
252 |
|
|
258 |
Other liabilities |
|
|
340 |
|
|
349 |
Total liabilities |
|
|
5,179 |
|
|
5,247 |
|
|
|
|
|
||
Redeemable noncontrolling interest |
|
|
— |
|
|
18 |
|
|
|
|
|
||
Equity |
|
|
157 |
|
|
98 |
Total liabilities and equity |
|
$ |
5,336 |
|
$ |
5,363 |
|
As of March 31, |
||||||
|
2024 |
|
2023 |
||||
Other Financial Data |
|
|
|
||||
Working capital days |
|
|
|
||||
Receivable days |
|
55 |
|
|
|
54 |
|
Inventory days |
|
81 |
|
|
|
80 |
|
Payable days |
|
71 |
|
|
|
70 |
|
Working capital |
$ |
1,470 |
|
|
$ |
1,612 |
|
Working capital as a % of sales (LTM) |
|
18.6 |
% |
|
|
19.1 |
% |
Historical information is available on our website.
Amounts may not add due to rounding.
MASCO CORPORATION |
|||||||
Condensed Consolidated Statements of Cash Flows and Other Financial Data - Unaudited |
|||||||
For the Three Months Ended March 31, 2024 and 2023 |
|||||||
(dollars in millions) |
|||||||
|
Three Months Ended March 31, |
||||||
|
2024 |
|
2023 |
||||
Cash Flows From (For) Operating Activities: |
|
|
|
||||
Cash provided by operating activities |
$ |
314 |
|
|
$ |
286 |
|
Working capital changes |
|
(409 |
) |
|
|
(253 |
) |
Net cash (for) from operating activities |
|
(94 |
) |
|
|
33 |
|
|
|
|
|
||||
Cash Flows From (For) Financing Activities: |
|
|
|
||||
Purchase of Company common stock |
|
(145 |
) |
|
|
(53 |
) |
Cash dividends paid |
|
(64 |
) |
|
|
(65 |
) |
Purchase of redeemable noncontrolling interest |
|
(15 |
) |
|
|
— |
|
Proceeds from revolving credit borrowings, net |
|
49 |
|
|
|
210 |
|
Proceeds from the exercise of stock options |
|
75 |
|
|
|
9 |
|
Employee withholding taxes paid on stock-based compensation |
|
(33 |
) |
|
|
(20 |
) |
Decrease in debt, net |
|
(1 |
) |
|
|
(3 |
) |
Net cash (for) from financing activities |
|
(134 |
) |
|
|
78 |
|
|
|
|
|
||||
Cash Flows From (For) Investing Activities: |
|
|
|
||||
Capital expenditures |
|
(31 |
) |
|
|
(61 |
) |
Other, net |
|
(2 |
) |
|
|
2 |
|
Net cash for investing activities |
|
(33 |
) |
|
|
(59 |
) |
|
|
|
|
||||
Effect of exchange rate changes on cash and cash investments |
|
(6 |
) |
|
|
6 |
|
|
|
|
|
||||
Cash and Cash Investments: |
|
|
|
||||
(Decrease) increase for the period |
|
(266 |
) |
|
|
58 |
|
At January 1 |
|
634 |
|
|
|
452 |
|
At March 31 |
$ |
368 |
|
|
$ |
510 |
|
|
As of March 31, |
||||
|
2024 |
|
2023 |
||
Liquidity |
|
|
|
||
Cash and cash investments |
$ |
368 |
|
$ |
510 |
Revolver availability |
|
951 |
|
|
790 |
Total Liquidity |
$ |
1,319 |
|
$ |
1,300 |
Historical information is available on our website.
Amounts may not add due to rounding.
MASCO CORPORATION |
||||||||||
Segment Data - Unaudited |
||||||||||
For the Three Months Ended March 31, 2024 and 2023 |
||||||||||
(dollars in millions) |
||||||||||
|
Three Months Ended March 31, |
|
|
|||||||
|
2024 |
|
2023 |
|
Change |
|||||
Plumbing Products |
|
|
|
|
|
|||||
Net sales |
$ |
1,192 |
|
|
$ |
1,222 |
|
|
(2 |
)% |
Operating profit, as reported |
$ |
226 |
|
|
$ |
206 |
|
|
|
|
Operating margin, as reported |
|
19.0 |
% |
|
|
16.9 |
% |
|
|
|
Rationalization charges (income) |
|
3 |
|
|
|
(4 |
) |
|
|
|
Operating profit, as adjusted |
|
228 |
|
|
|
202 |
|
|
|
|
Operating margin, as adjusted |
|
19.1 |
% |
|
|
16.5 |
% |
|
|
|
Depreciation and amortization |
|
26 |
|
|
|
25 |
|
|
|
|
EBITDA, as adjusted |
$ |
255 |
|
|
$ |
227 |
|
|
|
|
|
|
|
|
|
|
|||||
Decorative Architectural Products |
|
|
|
|
|
|||||
Net sales |
$ |
734 |
|
|
$ |
757 |
|
|
(3 |
)% |
Operating profit, as reported |
$ |
124 |
|
|
$ |
132 |
|
|
|
|
Operating margin, as reported |
|
16.9 |
% |
|
|
17.4 |
% |
|
|
|
Rationalization charges |
|
1 |
|
|
|
1 |
|
|
|
|
Operating profit, as adjusted |
|
125 |
|
|
|
133 |
|
|
|
|
Operating margin, as adjusted |
|
17.0 |
% |
|
|
17.6 |
% |
|
|
|
Depreciation and amortization |
|
10 |
|
|
|
8 |
|
|
|
|
EBITDA, as adjusted |
$ |
134 |
|
|
$ |
141 |
|
|
|
|
|
|
|
|
|
|
|||||
Total |
|
|
|
|
|
|||||
Net sales |
$ |
1,926 |
|
|
$ |
1,979 |
|
|
(3 |
)% |
Operating profit, as reported - segment |
$ |
350 |
|
|
$ |
338 |
|
|
|
|
General corporate expense, net |
|
(31 |
) |
|
|
(23 |
) |
|
|
|
Operating profit, as reported |
|
318 |
|
|
|
315 |
|
|
|
|
Operating margin, as reported |
|
16.5 |
% |
|
|
15.9 |
% |
|
|
|
Rationalization charges (income) - segment |
|
3 |
|
|
|
(3 |
) |
|
|
|
Operating profit, as adjusted |
|
322 |
|
|
|
312 |
|
|
|
|
Operating margin, as adjusted |
|
16.7 |
% |
|
|
15.8 |
% |
|
|
|
Depreciation and amortization - segment |
|
36 |
|
|
|
33 |
|
|
|
|
Depreciation and amortization - other |
|
2 |
|
|
|
2 |
|
|
|
|
EBITDA, as adjusted |
$ |
360 |
|
|
$ |
347 |
|
|
|
|
Historical information is available on our website.
Amounts may not add due to rounding.
MASCO CORPORATION |
||||||||||
North American and International Data - Unaudited |
||||||||||
For the Three Months Ended March 31, 2024 and 2023 |
||||||||||
(dollars in millions) |
||||||||||
|
Three Months Ended March 31, |
|
|
|||||||
|
2024 |
|
2023 |
|
Change |
|||||
North American |
|
|
|
|
|
|||||
Net sales |
$ |
1,526 |
|
|
$ |
1,555 |
|
|
(2 |
)% |
Operating profit, as reported |
$ |
285 |
|
|
$ |
266 |
|
|
|
|
Operating margin, as reported |
|
18.7 |
% |
|
|
17.1 |
% |
|
|
|
Rationalization charges (income) |
|
2 |
|
|
|
(3 |
) |
|
|
|
Operating profit, as adjusted |
|
287 |
|
|
|
263 |
|
|
|
|
Operating margin, as adjusted |
|
18.8 |
% |
|
|
16.9 |
% |
|
|
|
Depreciation and amortization |
|
23 |
|
|
|
21 |
|
|
|
|
EBITDA, as adjusted |
$ |
311 |
|
|
$ |
284 |
|
|
|
|
|
|
|
|
|
|
|||||
International |
|
|
|
|
|
|||||
Net sales |
$ |
400 |
|
|
$ |
424 |
|
|
(6 |
)% |
Operating profit, as reported |
$ |
65 |
|
|
$ |
72 |
|
|
|
|
Operating margin, as reported |
|
16.3 |
% |
|
|
17.0 |
% |
|
|
|
Rationalization charges |
|
1 |
|
|
|
— |
|
|
|
|
Operating profit, as adjusted |
|
66 |
|
|
|
72 |
|
|
|
|
Operating margin, as adjusted |
|
16.5 |
% |
|
|
17.0 |
% |
|
|
|
Depreciation and amortization |
|
12 |
|
|
|
12 |
|
|
|
|
EBITDA, as adjusted |
$ |
78 |
|
|
$ |
84 |
|
|
|
|
|
|
|
|
|
|
|||||
Total |
|
|
|
|
|
|||||
Net sales |
$ |
1,926 |
|
|
$ |
1,979 |
|
|
(3 |
)% |
Operating profit, as reported - segment |
$ |
350 |
|
|
$ |
338 |
|
|
|
|
General corporate expense, net |
|
(31 |
) |
|
|
(23 |
) |
|
|
|
Operating profit, as reported |
|
318 |
|
|
|
315 |
|
|
|
|
Operating margin, as reported |
|
16.5 |
% |
|
|
15.9 |
% |
|
|
|
Rationalization charges (income) - segment |
|
3 |
|
|
|
(3 |
) |
|
|
|
Operating profit, as adjusted |
|
322 |
|
|
|
312 |
|
|
|
|
Operating margin, as adjusted |
|
16.7 |
% |
|
|
15.8 |
% |
|
|
|
Depreciation and amortization - segment |
|
36 |
|
|
|
33 |
|
|
|
|
Depreciation and amortization - other |
|
2 |
|
|
|
2 |
|
|
|
|
EBITDA, as adjusted |
$ |
360 |
|
|
$ |
347 |
|
|
|
|
Historical information is available on our website.
Amounts may not add due to rounding.
