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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

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
  • 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.

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