Masco Corporation Reports First Quarter 2024 Results
Highlights
-
Net sales decreased 3 percent to
$1,926 million -
Operating profit increased 1 percent to
$318 million ; adjusted operating profit increased 3 percent to$322 million - Operating profit margin increased 60 basis points to 16.5 percent; adjusted operating profit margin increased 90 basis points to 16.7 percent
-
Earnings per share was
$0.97 per share; adjusted earnings per share grew 8 percent to$0.93 per share -
Repurchased 2.1 million shares for
$148 million -
Continue to expect 2024 earnings per share in the range of
$4.00 –$4.25 per share
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
-
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,
“With the year beginning largely as expected, we continue to anticipate that 2024 adjusted earnings per share will be in the range of
About Masco
Headquartered in
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
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
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
|
|||||||
Condensed Consolidated Statements of Operations - Unaudited |
|||||||
For the Three Months Ended |
|||||||
(in millions, except per common share data) |
|||||||
|
Three Months Ended |
||||||
|
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 |
$ |
215 |
|
|
$ |
205 |
|
|
|
|
|
||||
Income per common share attributable to |
|
|
|
||||
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.
|
|||||||
Exhibit A: Reconciliations - Unaudited |
|||||||
For the Three Months Ended |
|||||||
(dollars in millions) |
|||||||
|
Three Months Ended |
||||||
|
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 |
Historical information is available on our website.
Amounts may not add due to rounding.
|
|||||||
Exhibit A: Reconciliations - Unaudited |
|||||||
For the Three Months Ended |
|||||||
(in millions, except per common share data) |
|||||||
|
Three Months Ended |
||||||
|
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 |
Outlook for the Year Ended |
|||||
|
Year Ended |
||||
|
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.
|
||||||
Condensed Consolidated Balance Sheets and Other Financial Data - Unaudited |
||||||
|
||||||
(dollars in millions) |
||||||
|
|
|
|
|
||
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 |
|
|
|
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 |
||||||
|
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.
|
|||||||
Condensed Consolidated Statements of Cash Flows and Other Financial Data - Unaudited |
|||||||
For the Three Months Ended |
|||||||
(dollars in millions) |
|||||||
|
Three Months Ended |
||||||
|
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 |
|
634 |
|
|
|
452 |
|
At |
$ |
368 |
|
|
$ |
510 |
|
|
As of |
||||
|
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.
|
||||||||||
Segment Data - Unaudited |
||||||||||
For the Three Months Ended |
||||||||||
(dollars in millions) |
||||||||||
|
Three Months Ended |
|
|
|||||||
|
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.
|
||||||||||
North American and |
||||||||||
For the Three Months Ended |
||||||||||
(dollars in millions) |
||||||||||
|
Three Months Ended |
|
|
|||||||
|
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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240424871631/en/
Vice President, Investor Relations and FP&A
313.792.5500
robin_zondervan@mascohq.com
Source: