TAYLOR, Mich., Feb. 10 /PRNewswire-FirstCall/ -- 2009 Fourth
Quarter Trends -- Markets for most of our products are showing
modest improvement. -- Comparing the fourth quarter of 2009 to the
fourth quarter of 2008: -- Sales to key retailers increased eight
percent. -- Three of our five business segments had sales
increases. -- Our International operations had another strong
quarter. -- Operating profit (excluding impairment charges for
goodwill and other intangible assets) improved. 2009 Full-Year
Highlights -- Over $1.4 billion of cash at December 31, 2009. --
Free cash flow (cash from operations, less capital expenditures,
before dividends) approximated $550 million. -- Net sales from
continuing operations declined 18 percent to $7.8 billion. --
Income from continuing operations was $.11 per common share
excluding non-cash impairment charges for goodwill. -- (Loss) from
continuing operations, as reported, was ($.41) per common share.
Masco Corporation (NYSE:MAS) today reported that net sales from
continuing operations for the year ended December 31, 2009 declined
18 percent to $7.8 billion from $9.5 billion for 2008. North
American sales declined 18 percent and International sales declined
17 percent. In local currencies, International sales declined ten
percent compared with 2008. Income from continuing operations was
$.11 per common share and $.20 per common share for 2009 and 2008,
respectively, excluding non-cash impairment charges for goodwill
and other intangible assets. Including these charges, the loss from
continuing operations, as reported, was ($140) million or ($.41)
per common share and ($366) million or ($1.06) per common share for
the years ended December 31, 2009 and 2008, respectively. "We are
very encouraged by our 2009 financial and operating performance in
one of the more difficult economic environments Masco has ever
experienced. Although our sales were down 18 percent, compared to
2008, we were able to offset a significant portion of our volume
declines, primarily as a result of innovative new product
introductions and market share gains," said Masco's CEO Tim
Wadhams. "Obviously, forecasting business conditions and Company
performance was extremely challenging in 2009, but having said
that, we continued to exceed our expectations for sales, operating
profit and cash flow as the year progressed. Ending the year with
over $1.4 billion of cash is a testament to the world-wide Masco
Team's dedication and commitment to our emphasis on cash
generation. We are very proud of their accomplishments," added
Wadhams. Results for 2009 were adversely affected by lower sales
volume of new home construction products and services, as well as a
decline in consumer spending for home improvement products in both
North American and International markets. The negative market
conditions were partially offset by increased sales volume of
paints and stains, market share gains, the improved relationship
between selling prices and commodity costs and benefits associated
with business rationalizations and other cost savings initiatives.
We continue to focus on the rationalization of our businesses,
including business consolidations, plant closures, headcount
reductions, system implementations and other initiatives. During
2009 and 2008, we incurred costs and charges of $94 million pre-tax
($.17 per common share, after tax) and $78 million pre-tax ($.14
per common share, after tax), respectively, related to these
initiatives. During 2009, we recognized non-cash, pre-tax
impairment charges for goodwill (in the fourth quarter) aggregating
$262 million ($.51 per common share, after tax), non-cash, pre-tax
impairment charges for financial investments aggregating $10
million ($.02 per common share, after tax) and pre-tax currency
transaction gains of $17 million ($.03 per common share, after
tax). During 2008, we recognized non-cash, pre-tax impairment
charges for goodwill and other intangible assets (in the fourth
quarter) aggregating $467 million ($1.26 per common share, after
tax), non-cash, pre-tax impairment charges for financial
investments aggregating $58 million ($.10 per common share, after
tax) and pre-tax currency transaction losses of $29 million ($.05
per common share, after tax). Fourth Quarter 2009 Fourth quarter
2009 net sales from continuing operations declined three percent to
$1.9 billion compared with $2.0 billion for the fourth quarter
2008. North American sales declined seven percent and International
sales increased 12 percent. In local currencies, International
sales increased one percent compared with the fourth quarter of
2008. Income (loss) from continuing operations was $.02 per common
share and ($.17) per common share for the fourth quarters of 2009
and 2008, respectively, excluding non-cash impairment charges for
goodwill and other intangible assets. Including these charges, loss
from continuing operations, as reported, was ($173) million or
($.49) per common share and ($504) million or ($1.44) per common
share for the fourth quarters of 2009 and 2008, respectively.
During the fourth quarters of 2009 and 2008, we incurred costs and
charges of $27 million pre-tax ($.05 per common share, after tax)
and $39 million pre-tax ($.07 per common share, after tax),
respectively, related to the rationalization of our businesses. In
addition, in the fourth quarter of 2008, we recognized non-cash,
pre-tax impairment charges for financial investments of $28 million
($.05 per common share, after tax). "Although new home construction
and big-ticket remodeling activity continues to be depressed, our
other product groups experienced relatively solid top-line repair
and remodel sales growth in the fourth quarter of 2009. The fourth
quarter of 2009 is the first quarter in a long time where sales to
key retailers and operating profit, adjusted for impairment
charges, exceeded the prior year quarter. We are encouraged by
these positive trends, and we continue to increase market share in
key segments as we move into 2010," said Tim Wadhams. 2010 Outlook
We expect that business conditions in 2010 will improve compared to
2009. While we are concerned about the impact of current
unemployment levels, foreclosure activity and access to financing,
we believe that housing starts will improve in 2010 and will
increase to a range of 600,000 to 700,000 units. While we
anticipate that expenditures on repair and remodel activity will
improve modestly in 2010 from 2009 levels, we believe that
big-ticket items will continue to be deferred, in the short-term,
until general economic conditions, credit availability and home
prices improve. We are confident that the long-term fundamentals
for the new home construction and home improvement markets are
positive. We believe that our strong financial position, together
with our current strategy of investing in leadership brands
(including: KraftMaid and Merillat cabinets, Delta and Hansgrohe
faucets, Behr paint and Milgard windows), our continued focus on
innovation and our commitment to lean principles will allow us to
drive long-term growth and create value for our shareholders.
Beginning with 2010, Masco will no longer provide definitive
earnings per common share and cash flow guidance. Instead, we will
provide additional segment detail, along with estimates of key
financial data. 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 2009 fourth quarter and full-year
supplemental material including a presentation in PDF format, will
be distributed after the market closes on February 10, 2010 and
will be available on the Company's Web site at
http://www.masco.com/. A conference call regarding items contained
in this release is scheduled for Thursday, February 11, 2010 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)
312-0653 (confirmation #4115783). The conference call will be
webcast simultaneously and in its entirety through the Masco
Corporation Web site. Shareholders, media representatives and
others interested in Masco may participate in the webcast by
registering through the Investor Relations section on the Company's
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
#4115783). The replay will be available approximately two hours
after the end of the call and continue through February 18, 2010.
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 Web site at
http://www.masco.com/. Statements contained herein, or otherwise
made available, that reflect the Company's views about its future
performance may constitute "forward-looking statements" under the
Private Securities Litigation Reform Act of 1995. These views
involve risks and uncertainties that are difficult to predict and
the Company's results may differ materially from the results
discussed in such forward-looking statements. For further
information, refer to our most recent Annual Report on Form 10-K
(particularly the "Risk Factors" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations"
sections) and to any subsequent Quarterly Reports on Form 10-Q, all
of which are on file with the Securities and Exchange Commission.
The Company undertakes no obligation to update any forward-looking
statements, whether as a result of new information, future events
or otherwise. Certain of the financial and statistical data made
available are non-GAAP financial measures as defined by the SEC's
Regulation G. The Company believes that such non-GAAP performance
measures and ratios used in managing the business may provide users
with 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 is
contained in the Company's filings with the SEC and is available on
Masco's Web site. MASCO CORPORATION CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS - UNAUDITED For the Three Months and
Twelve Months Ended December 31, 2009 and 2008 (In Millions, Except
Per Common Share Data) Three Months Twelve Months Ended Ended
December 31, December 31, ------------ ------------ 2009 2008 2009
2008 ---- ---- ---- ---- Net sales $1,898 $1,956 $7,792 $9,484 Cost
of sales 1,403 1,559 5,774 7,125 ----- ----- ----- ----- Gross
profit 495 397 2,018 2,359 Selling, general and administrative
expenses 430 414 1,693 1,802 Impairment charges for goodwill and
other intangible assets 262 467 262 467 Charge for defined-benefit
plan curtailment - - 8 - --- --- --- --- Operating (loss) profit
(197) (484) 55 90 Other income (expense), net (49) (87) (206) (283)
--- --- ---- ---- (Loss) income from continuing operations before
income taxes (246) (571) (151) (193) Income tax (benefit) expense
(84) (71) (49) 134 --- --- --- --- (Loss) income from continuing
operations (162) (500) (102) (327) (Loss) from discontinued
operations, net (12) (4) (43) (25) --- --- --- --- Net (loss)
income (174) (504) (145) (352) Less: Net income attributable to
non- controlling interest 11 4 38 39 --- --- --- --- Net (loss)
income attributable to Masco Corporation $(185) $(508) $(183)
$(391) ===== ===== ===== ===== Earnings (loss) per common share
attributable to Masco Corporation (diluted): (Loss) income from
continuing operations $(0.49) $(1.44) $(0.41) $(1.06) (Loss) from
discontinued operations, net (0.03) (0.01) (0.12) (0.07) -----
----- ----- ----- Net (loss) income attributable to Masco
Corporation $(0.53) $(1.45) $(0.53) $(1.13) ====== ====== ======
====== Average diluted common shares outstanding 352 351 351 353
=== === === === Amounts attributable to Masco Corporation: (Loss)
income from continuing operations $(173) $(504) $(140) $(366)
(Loss) from discontinued operations, net (12) (4) (43) (25) --- ---
--- --- Net (loss) income attributable to Masco Corporation $(185)
$(508) $(183) $(391) ===== ===== ===== ===== Masco Corporation Key
Financial Data As Reported - Unaudited Q4 - 2009 and 2008 (In
Millions, Except Earnings Per Share) Sales & Earnings
12/31/2009 12/31/2008 Change ---------------- ---------- ----------
------ Net Sales $1,898 $1,956 -3% Operating (Loss) $(197) $(484)
N/A Operating (Loss) % of Net Sales -10.4% -24.7% 1,430 bps Other
Income (Expense), Net $(49) $(87) 44% Income Tax (Benefit) $(84)
$(71) N/A (Loss) From Continuing Operations Attributable to Masco
Corporation $(173) $(504) N/A Diluted EPS from Continuing
Operations $(0.49) $(1.44) N/A Operating Expenses 12/31/2009
12/31/2008 Change ------------------ ---------- ---------- ------
Cost of Sales $1,403 $1,559 -10% Gross Margin 26.1% 20.3% 580 bps
SG&A Expenses (Including GCE) $430 $414 4% SG&A as a % of
net sales 22.7% 21.2% (150) bps General Corporate Expense (GCE) $44
$34 29% General Corp Expense as a % of net sales 2.3% 1.7% 60 bps
------------------------------------------ --- --- --- Business
Segments 12/31/2009 12/31/2008 Change ----------------- ----------
---------- ------ Cabinets and Related Products: Net Sales $426
$488 -13% Operating (Loss) $(8) $(84) N/A Operating (Loss) % of Net
Sales -1.9% -17.2% 1,530 bps Plumbing Products: Net Sales $671 $612
10% Operating Profit (Loss) $35 $(193) N/A Operating Profit (Loss)
% of Net Sales 5.2% -31.5% 3,670 bps Installation and Other
Services: Net Sales $295 $375 -21% Operating (Loss) $(27) $(54) N/A
Operating (Loss) % of Net Sales -9.2% -14.4% 520 bps Decorative
Architectural Products: Net Sales $349 $328 6% Operating Profit $62
$42 N/A Operating Profit % of Net Sales 17.8% 12.8% 500 bps Other
Specialty Products: Net Sales $157 $153 3% Operating (Loss) $(215)
$(161) N/A Operating (Loss) % of Net Sales -136.9% -105.2% (3,170)
bps Total Segment Reported: Net Sales $1,898 $1,956 -3% Operating
(Loss) $(153) $(450) N/A Operating (Loss) % of Net Sales -8.1%
-23.0% 1,490 bps Change in Key Retailer Sales 8% -14%
---------------------------- --- --- Masco Corporation Key
Financial Data As Reported - Unaudited Q4 - 2009 and 2008 (In
Millions, Except Earnings Per Share) Business Regions 12/31/2009
12/31/2008 Change ----------------- ---------- ---------- ------
North America Net Sales $1,441 $1,547 -7% Operating (Loss) $(168)
$(49) N/A Operating (Loss) % of Net Sales -11.7% -3.2% (850) bps
International, principally Europe Net Sales $457 $409 12% Operating
Profit (Loss) $15 $(401) N/A Operating Profit (Loss) % of Net Sales
3.3% -98.0% 10,130 bps ------------------------------------------
--- ----- ------ Other 12/31/2009 12/31/2008 ----- ----------
---------- Dividend Payments $27 $85 Cash Paid for Share
Repurchases $- $- Common Shares Repurchased - - CAPEX $55 $58
Depreciation and Amortization $64 $59 Average diluted common shares
outstanding 352 351 ----------------------------------------- ---
--- Masco Corporation Key Financial Data As Reported - Unaudited
Full Year - 2009 and 2008 (In Millions, Except Earnings Per Share
and Working Capital Days) Sales & Earnings 12/31/2009
12/31/2008 Change ---------------- ---------- ---------- ------ Net
Sales $7,792 $9,484 -18% Operating Profit $55 $90 N/A Operating
Profit % of Net Sales 0.7% 0.9% (20) bps Other Income (Expense),
Net $(206) $(283) 27% Income Tax (Benefit) Expense $(49) $134 N/A
(Loss) From Continuing Operations Attributable to Masco Corporation
$(140) $(366) N/A Diluted EPS from Continuing Operations $(0.41)
$(1.06) N/A Operating Expenses 12/31/2009 12/31/2008 Change
------------------ ---------- ---------- ------ Cost of Sales
$5,774 $7,125 -19% Gross Margin 25.9% 24.9% 100 bps SG&A
Expenses (Including GCE) $1,701 $1,802 -6% SG&A as a % of net
sales 21.8% 19.0% (280) bps General Corporate Expense (GCE) $140
$144 -3% General Corp Expense as a % of net sales 1.8% 1.5% (30)
bps ------------------------------------------ --- --- --- Business
Segments 12/31/2009 12/31/2008 Change ----------------- ----------
---------- ------ Cabinets and Related Products: Net Sales $1,674
$2,276 -26% Operating (Loss) Profit $(64) $4 N/A Operating (Loss)
Profit % of Net Sales -3.8% 0.2% (400) bps Plumbing Products: Net
Sales $2,564 $3,002 -15% Operating Profit $237 $110 N/A Operating
Profit % of Net Sales 9.2% 3.7% 550 bps Installation and Other
Services: Net Sales $1,256 $1,861 -33% Operating (Loss) $(131)
$(46) N/A Operating (Loss) % of Net Sales -10.4% -2.5% (790) bps
Decorative Architectural Products: Net Sales $1,714 $1,629 5%
Operating Profit $375 $299 N/A Operating Profit % of Net Sales
21.9% 18.4% 350 bps Other Specialty Products: Net Sales $584 $716
-18% Operating Loss $(199) $(124) N/A Operating (Loss) % of Net
Sales -34.1% -17.3% (1,680) bps Total Segment Reported: Net Sales
$7,792 $9,484 -18% Operating Profit $218 $243 N/A Operating Profit
% of Net Sales 2.8% 2.6% 20 bps Change in Key Retailer Sales -4%
-12% ---------------------------- --- --- Masco Corporation Key
Financial Data As Reported - Unaudited Full Year - 2009 and 2008
(In Millions, Except Earnings Per Share and Working Capital Days)
Business Regions 12/31/2009 12/31/2008 Change -----------------
---------- ---------- ------ North America Net Sales $6,135 $7,482
-18% Operating Profit $93 $493 N/A Operating Profit % to Net Sales
1.5% 6.6% (510) bps International, principally Europe Net Sales
$1,657 $2,002 -17% Operating Profit (Loss) $125 $(250) N/A
Operating Profit (Loss) % to Net Sales 7.5% -12.5% 2,000 bps
------------------------------------------ --- ----- ----- Working
Capital 12/31/2009 12/31/2008 Change --------------- ----------
---------- ------ Receivable Days 48 50 (2) Inventory Days 48 48 -
Payable Days 47 43 4 Working Capital (Receivables+Inventory-
Payables) $1,148 $1,409 -19% Working Capital as a % of Sales (As
Reported TTM(1)) 14.7% 14.7% - bps
-------------------------------------- ---- ---- --- Other
12/31/2009 12/31/2008 ----- ---------- ---------- Dividend Payments
$166 $336 Cash Paid for Share Repurchases(2) $11 $160 Common Shares
Repurchased(2) 2 9 CAPEX $125 $200 Depreciation and Amortization
$254 $238 Return on Invested Capital (As Reported TTM(1)) 0.5% 0.8%
Return on Invested Capital (As Reconciled TTM(1)) 3.6% 5.3% Average
diluted common shares outstanding 351 353 Average diluted common
shares outstanding (January 1) 350 359
----------------------------------------- --- --- Debt Ratio
12/31/2009 12/31/2008 ---------- ---------- ---------- Long-Term
Debt $3,604 $3,915 Notes Payable $364 $71 Total Debt $3,968 $3,986
Shareholders' Equity(3) $2,817 $2,981 Debt to Capital 58% 57%
--------------- --- --- (1) Trailing twelve months. (2) Common
shares were repurchased to offset the effect of stock award grants
in the first quarter of 2009. (3) Shareholders' Equity at 12/31/08
includes $135 million related to the noncontrolling interest
reclassification. DATASOURCE: Masco Corporation CONTACT: Investor /
Media: Maria Duey, Vice President - Investor Relations,
+1-313-792-5500, Web Site: http://www.masco.com/
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