2012-02-13 23:02:10 -
FOR IMMEDIATE RELEASE
2011 Full-Year Commentary
* At $7.5 billion, net sales were relatively flat compared to 2010.
* Results for key financial measures, as adjusted for certain items (see
Exhibit A) and with a normalized tax rate of 36 percent, compared to the
full-year of 2010 were as follows:
* Gross profit margins were 25.1 percent compared to 26.7 percent
* Operating profit margins were 4.4 percent compared to 5.9 percent
* Income from continuing operations was $.02 per common share compared to $.23
per common share
* Loss from continuing operations, as reported was $(1.34) per common share
compared to $(2.94) per common share in 2010.
* We recorded an impairment charge for goodwill and other intangible assets
which reduced our reported earnings by $(.96) per common share for the full-
year and fourth quarter of 2011.
* Working capital as a percent of sales improved to 12.2 percent at December
31, 2011, compared to 13.4 percent at December 31, 2010.
* Free cash flow (cash from operations, less capital expenditures, before
dividends) was approximately $71 million.
* We ended 2011 with approximately $1.7 billion of cash.
Taylor, Mich., (February 13, 2012) - Masco Corporation (NYSE: MAS) today
reported that net sales from continuing operations for the year ended December
31, 2011 at $7.5 billion were relatively flat, compared to 2010. North American
sales decreased three percent and International sales increased eight percent
compared to 2010. In local currencies, International sales increased three
percent compared with 2010.
Income from continuing operations was $.02 per common share and $.23 per common
share for 2011 and 2010, respectively, excluding the items in Exhibit A and with
a normalized tax rate of 36 percent. Including these items, loss from
continuing operations, as reported was $(1.34) per common share and $(2.94) per
common share for the years ended December 31, 2011 and 2010, respectively.
"Our performance in 2011 was challenged by commodity cost volatility, a
competitive retail environment, a flat housing environment in North America and
difficult economic conditions in Europe" said Masco's President and CEO, Tim
Wadhams. "Despite these headwinds, we continued to: strengthen our leading brand
positions, including the introduction of new products and programs; improve our
cost structure and productivity; invest in future growth opportunities and
improve our working capital management."
2011 marked the completion of our major rationalization activities, including
business consolidations, plant closures, headcount reductions, system
implementations and other initiatives. During 2011 and 2010, we incurred costs
and charges of $121 million pre-tax ($.22 per common share, after tax) and $208
million pre-tax ($.38 per common share, after tax), respectively, related to
these initiatives. "We believe these actions have better positioned our
businesses for the current environment and have improved our leverage to a
housing recovery," said Mr. Wadhams.
In the fourth quarter of 2011, we recorded non-cash, pre-tax impairment charges
for goodwill and other intangible assets of $494 million ($.96 per common share,
after tax). The impairment charge for goodwill and other intangible assets is
primarily related to our North American window business in our Other Specialty
Products segment.
In the fourth quarter of 2010, we recorded non-cash, pre-tax impairment charges
for goodwill and other intangible assets of $698 million ($1.68 per common
share, after tax).
We recently successfully amended our revolving credit facility to reflect the
impact of our impairment charges in 2011 for goodwill and other intangible
assets and the valuation allowance for our deferred tax assets on our net
worth. We currently have borrowing capacity of approximately $630 million
available under the revolving credit facility.
Fourth Quarter 2011
2011 Fourth Quarter Commentary
* Sales increased one percent to over $1.7 billion
* Results for key financial measures, as adjusted for certain items (see
Exhibit B) and with a normalized tax rate of 36 percent, compared to the
fourth quarter of 2010 were as follows:
* Gross profit margins were 21.9 percent compared to 23.5 percent
* Operating profit margins were 1.6 percent compared to 1.9 percent
* Loss from continuing operations was $(.09) per common share compared to
$(.08) per common share
* Loss from continuing operations, as reported was $(1.42) per common share
compared to $(2.92) per common share in the fourth quarter of 2010
Fourth quarter 2011 net sales from continuing operations increased one percent,
to over $1.7 billion compared with $1.7 billion for the fourth quarter of
2010. North American sales increased two percent and International sales
decreased one percent. In local currencies, International sales were flat
compared with the fourth quarter of 2010.
Loss from continuing operations was $(.09) per common share and $(.08) per
common share, for the fourth quarters of 2011 and 2010, respectively, excluding
the items in Exhibit B and with a normalized tax rate of 36 percent. Including
these items, loss from continuing operations, as reported, was $(1.42) per
common share in the fourth quarter of 2011 compared to $(2.92) per common share
in the fourth quarter of 2010.
During the fourth quarters of 2011 and 2010, we incurred business
rationalization costs and charges of $61 million pre-tax ($.11 per common share,
after tax) and $104 million pre-tax ($.19 per common share, after tax),
respectively.
Outlook 2012
"While 2011 was a difficult year, we head into 2012 with cautious optimism. The
major restructuring activities impacting our Installation segment and our North
American cabinet operations are behind us and those businesses experienced
improving operational trends in the fourth quarter. While our efforts to reduce
costs and increase revenues did not improve performance as quickly as we
anticipated in 2011, we firmly believe that these actions will drive significant
improvement in 2012, even if we see no improvement in the housing markets. In
cabinetry, we have taken significant actions to drive improvement both in North
America and Europe, but do remain concerned about general economic conditions in
the UK and Europe" said Mr. Wadhams.
"We are focused on achieving our 2012 strategic initiatives, which include
leveraging our brands, reducing our costs, improving our Installation and
Cabinet segments and strengthening our balance sheet. We believe these
initiatives, coupled with the actions we have taken over the past several years,
should position us for improved results in 2012 even in a flat housing market,
and continue to believe that we will outperform as the housing market recovers."
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 fourth quarter supplemental material, including a presentation in PDF
format, will be distributed after the market closes on February 13, 2012 and
will be available on the Company's Web site at www.masco.com.
A conference call regarding items contained in this release is scheduled for
Tuesday, February 14, 2012 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
(719) 325-2397 (confirmation #1748843). The conference call will be webcast
simultaneously on the Company's Web site at www.masco.com 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 #1748843) approximately two hours
after the end of the call and will continue through February 21, 2012.
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 atwww.masco.com.
Statements contained in this press release that reflect our views about our
future performance constitute "forward-looking statements" under the Private
Securities Litigation Reform Act of 1995. Forward-looking statements can be
identified by words such as "believe," "anticipate,"
"appear," "may," "will,"
"should," "intend," "plan," "estimate,"
"expect," "assume," "seek," "forecast,"
and similar references to future periods. These views 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 our reliance on new home
construction and home improvement, our reliance on key customers, the cost and
availability of raw materials, shifts in consumer preferences and purchasing
practices, and our ability to achieve cost savings through restructuring and
other initiatives. 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. Our forward-looking statements in this press release
speak only as of the date of this press release. 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.
The Company believes that the non-GAAP performance measures and ratios that are
contained herein, 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 is contained in the Company's
filings with the Securities and Exchange Commission and is available on Masco's
Web site at www.masco.com.
# # #
Investor / Media Contact
Maria Duey
Vice President - Investor Relations and Communications
313.792.5500
maria_duey@mascohq.com
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Source: Masco Corporation via Thomson Reuters ONE
[HUG#1585186]
