10/27/2021 | Press release | Distributed by Public on 10/27/2021 05:10
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||
2021 | 2020 | 2021 | 2020 | |||||
Net sales | $ | 2,204 | $ | 1,983 | $ | 6,353 | $ | 5,328 |
Cost of sales | 1,451 | 1,231 | 4,109 | 3,401 | ||||
Gross profit | 753 | 752 | 2,244 | 1,927 | ||||
Selling, general and administrative expenses | 368 | 328 | 1,057 | 939 | ||||
Operating profit | 385 | 424 | 1,187 | 988 | ||||
Other expense, net: | ||||||||
Interest expense | (26) | (40) | (253) | (110) | ||||
Other, net | (17) | (4) | (438) | (22) | ||||
(43) | (44) | (691) | (132) | |||||
Income from continuing operations before income taxes | 342 | 380 | 496 | 856 | ||||
Income tax expense | 103 | 87 | 158 | 202 | ||||
Income from continuing operations | 239 | 293 | 338 | 654 | ||||
Income from discontinued operations, net | - | - | - | 411 | ||||
Net income | 239 | 293 | 338 | 1,065 | ||||
Less: Net income attributable to noncontrolling interest
|
19 | 18 | 60 | 36 | ||||
Net income attributable to Masco Corporation | $ | 220 | $ | 275 | $ | 278 | $ | 1,029 |
Income per common share attributable to Masco Corporation (diluted): | ||||||||
Income from continuing operations | $ | 0.89 | $ | 1.05 | $ | 1.07 | $ | 2.31 |
Income from discontinued operations, net | - | - | - | 1.54 | ||||
Net income | $ | 0.89 | $ | 1.05 | $ | 1.07 | $ | 3.85 |
Average diluted common shares outstanding | 247 | 261 | 253 | 266 | ||||
Amounts attributable to Masco Corporation: | ||||||||
Income from continuing operations | $ | 220 | $ | 275 | $ | 278 | $ | 618 |
Income from discontinued operations, net | - | - | - | 411 | ||||
Net income attributable to Masco Corporation | $ | 220 | $ | 275 | $ | 278 | $ | 1,029 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||
2021 | 2020 | 2021 | 2020 | |||||
Gross Profit, Selling, General and Administrative Expenses, and Operating Profit Reconciliations | ||||||||
Net sales | $ | 2,204 | $ | 1,983 | $ | 6,353 | $ | 5,328 |
Gross profit, as reported | $ | 753 | $ | 752 | $ | 2,244 | $ | 1,927 |
Rationalization charges | - | 1 | 2 | 7 | ||||
Gross profit, as adjusted | $ | 753 | $ | 753 | $ | 2,246 | $ | 1,934 |
Gross margin, as reported | 34.2 | % | 37.9 | % | 35.3 | % | 36.2 | % |
Gross margin, as adjusted | 34.2 | % | 38.0 | % | 35.4 | % | 36.3 | % |
Selling, general and administrative expenses, as reported
|
$ | 368 | $ | 328 | $ | 1,057 | $ | 939 |
Rationalization charges
|
- | - | - | 2 | ||||
Selling, general and administrative expenses, as adjusted
|
$ | 368 | $ | 328 | $ | 1,057 | $ | 937 |
Selling, general and administrative expenses as percent of net sales, as reported
|
16.7 | % | 16.5 | % | 16.6 | % | 17.6 | % |
Selling, general and administrative expenses as percent of net sales, as adjusted
|
16.7 | % | 16.5 | % | 16.6 | % | 17.6 | % |
Operating profit, as reported | $ | 385 | $ | 424 | $ | 1,187 | $ | 988 |
Rationalization charges | - | 1 | 2 | 9 | ||||
Operating profit, as adjusted | $ | 385 | $ | 425 | $ | 1,189 | $ | 997 |
Operating margin, as reported | 17.5 | % | 21.4 | % | 18.7 | % | 18.5 | % |
Operating margin, as adjusted | 17.5 | % | 21.4 | % | 18.7 | % | 18.7 | % |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||
2021 | 2020 | 2021 | 2020 | |||||
Income Per Common Share Reconciliations | ||||||||
Income from continuing operations before income taxes, as reported | $ | 342 | $ | 380 | $ | 496 | $ | 856 |
Rationalization charges | - | 1 | 2 | 9 | ||||
Pension costs associated with terminated plans | - | 6 | 422 | 17 | ||||
Fair value adjustment to contingent earnout obligation | 14 | - | 14 | - | ||||
Loss on sale of business | - | - | 18 | - | ||||
(Gain) on preferred stock redemption | - | - | (14) | - | ||||
(Earnings) from equity investments, net | (5) | (1) | (7) | (1) | ||||
Loss on extinguishment of debt | - | 6 | 168 | 6 | ||||
Income from continuing operations before income taxes, as adjusted
|
351 | 392 | 1,099 | 887 | ||||
Tax at 25% rate | (88) | (98) | (275) | (222) | ||||
Less: Net income attributable to noncontrolling interest
|
19 | 18 | 60 | 36 | ||||
Income from continuing operations, as adjusted
|
$ | 244 | $ | 276 | $ | 764 | $ | 629 |
Income from continuing operations per common share, as adjusted
|
$ | 0.99 | $ | 1.06 | $ | 3.02 | $ | 2.36 |
Average diluted common shares outstanding | 247 | 261 | 253 | 266 |
Twelve Months Ended December 31, 2021 | ||||
Low End | High End | |||
Income Per Common Share Outlook | ||||
Income from continuing operations per common share | $ | 1.67 | $ | 1.73 |
Rationalization charges | 0.01 | 0.01 | ||
Pension costs associated with terminated plans (1)
|
1.32 | 1.32 | ||
Fair value adjustment to contingent earnout obligation (2)
|
0.04 | 0.04 | ||
Loss on sale of business | 0.05 | 0.05 | ||
(Gain) on preferred stock redemption | (0.04) | (0.04) | ||
(Earnings) from equity investments, net | (0.02) | (0.02) | ||
Loss on extinguishment of debt | 0.53 | 0.53 | ||
Losses providing no tax benefit (3)
|
0.08 | 0.08 | ||
Allocation to participating securities per share (4)
|
0.03 | 0.03 | ||
Income from continuing operations per common share, as adjusted | $ | 3.67 | $ | 3.73 |
September 30, 2021 | December 31, 2020 | |||
Balance Sheet | ||||
Assets | ||||
Current Assets: | ||||
Cash and cash investments | $ | 854 | $ | 1,326 |
Receivables | 1,330 | 1,138 | ||
Prepaid expenses and other | 113 | 149 | ||
Inventories | 1,107 | 876 | ||
Total Current Assets | 3,404 | 3,489 | ||
Property and equipment, net | 887 | 908 | ||
Operating lease right-of-use assets | 171 | 166 | ||
Goodwill | 617 | 563 | ||
Other intangible assets, net | 395 | 357 | ||
Other assets | 121 | 294 | ||
Total Assets | $ | 5,595 | $ | 5,777 |
Liabilities | ||||
Current Liabilities: | ||||
Accounts payable | $ | 1,037 | $ | 893 |
Notes payable | 10 | 3 | ||
Accrued liabilities | 832 | 1,038 | ||
Total Current Liabilities | 1,879 | 1,934 | ||
Long-term debt | 2,950 | 2,792 | ||
Noncurrent operating lease liabilities | 155 | 149 | ||
Other liabilities | 485 | 481 | ||
Total Liabilities | 5,469 | 5,356 | ||
Redeemable noncontrolling interest | 25 | - | ||
Equity | 101 | 421 | ||
Total Liabilities and Equity | $ | 5,595 | $ | 5,777 |
As of September 30, | ||||
2021 | 2020 | |||
Other Financial Data | ||||
Working Capital Days | ||||
Receivable days | 51 | 55 | ||
Inventory days | 80 | 70 | ||
Payable days | 65 | 74 | ||
Working capital | $ | 1,400 | $ | 1,140 |
Working capital as a % of sales (LTM)
|
17.0 | % | 16.4 | % |
Nine Months Ended September 30, | ||||
2021 | 2020 | |||
Cash Flows From (For) Operating Activities: | ||||
Cash provided by operating activities | $ | 904 | $ | 590 |
Working capital changes | (309) | (17) | ||
Net cash from operating activities | 595 | 573 | ||
Cash Flows From (For) Financing Activities: | ||||
Retirement of notes | (1,326) | (400) | ||
Purchase of Company common stock | (878) | (602) | ||
Cash dividends paid | (154) | (108) | ||
Dividends paid to noncontrolling interest | (43) | (23) | ||
Issuance of notes, net of issuance costs | 1,481 | 415 | ||
Debt extinguishment costs | (160) | (5) | ||
Proceeds from the exercise of stock options | 1 | 26 | ||
Employee withholding taxes paid on stock-based compensation | (14) | (25) | ||
(Decrease) increase in debt, net | (2) | 1 | ||
Net cash for financing activities | (1,095) | (721) | ||
Cash Flows From (For) Investing Activities: | ||||
Capital expenditures | (82) | (72) | ||
Acquisition of businesses, net of cash acquired | (57) | (24) | ||
Proceeds from disposition of businesses, net of cash disposed | 5 | 868 | ||
Proceeds from disposition of other financial investments | 170 | 2 | ||
Other, net | 7 | (4) | ||
Net cash from investing activities | 43 | 770 | ||
Effect of exchange rate changes on cash and cash investments | (15) | 7 | ||
Cash and Cash Investments: | ||||
(Decrease) increase for the period | (472) | 629 | ||
At January 1 | 1,326 | 697 | ||
At September 30 | $ | 854 | $ | 1,326 |
As of September 30, | ||||
2021 | 2020 | |||
Liquidity | ||||
Cash and cash investments | $ | 854 | $ | 1,326 |
Revolver availability | 1,000 | 1,000 | ||
Total Liquidity | $ | 1,854 | $ | 2,326 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
2021 | 2020 | Change | 2021 | 2020 | Change | |||||||
Plumbing Products | ||||||||||||
Net sales | $ | 1,329 | $ | 1,141 | 16 | % | $ | 3,907 | $ | 2,964 | 32 | % |
Operating profit, as reported | $ | 248 | $ | 271 | $ | 773 | $ | 583 | ||||
Operating margin, as reported | 18.7 | % | 23.8 | % | 19.8 | % | 19.7 | % | ||||
Rationalization charges | - | - | 2 | 5 | ||||||||
Accelerated depreciation related to rationalization activity
|
- | - | - | 1 | ||||||||
Operating profit, as adjusted | 248 | 271 | 775 | 589 | ||||||||
Operating margin, as adjusted | 18.7 | % | 23.8 | % | 19.8 | % | 19.9 | % | ||||
Depreciation and amortization | 26 | 21 | 76 | 61 | ||||||||
EBITDA, as adjusted | $ | 274 | $ | 292 | $ | 851 | $ | 650 | ||||
Decorative Architectural Products | ||||||||||||
Net sales | $ | 875 | $ | 842 | 4 | % | $ | 2,446 | $ | 2,364 | 3 | % |
Operating profit, as reported | $ | 166 | $ | 179 | $ | 496 | $ | 475 | ||||
Operating margin, as reported | 19.0 | % | 21.3 | % | 20.3 | % | 20.1 | % | ||||
Rationalization charges | - | 1 | - | 3 | ||||||||
Operating profit, as adjusted | 166 | 180 | 496 | 478 | ||||||||
Operating margin, as adjusted | 19.0 | % | 21.4 | % | 20.3 | % | 20.2 | % | ||||
Depreciation and amortization | 8 | 10 | 27 | 31 | ||||||||
EBITDA, as adjusted | $ | 174 | $ | 190 | $ | 523 | $ | 509 | ||||
Total | ||||||||||||
Net sales | $ | 2,204 | $ | 1,983 | 11 | % | $ | 6,353 | $ | 5,328 | 19 | % |
Operating profit, as reported - segment | $ | 414 | $ | 450 | $ | 1,269 | $ | 1,058 | ||||
General corporate expense, net | (29) | (26) | (82) | (70) | ||||||||
Operating profit, as reported | 385 | 424 | 1,187 | 988 | ||||||||
Operating margin, as reported | 17.5 | % | 21.4 | % | 18.7 | % | 18.5 | % | ||||
Rationalization charges - segment | - | 1 | 2 | 8 | ||||||||
Accelerated depreciation related to rationalization activity - segment
|
- | - | - | 1 | ||||||||
Operating profit, as adjusted | 385 | 425 | 1,189 | 997 | ||||||||
Operating margin, as adjusted | 17.5 | % | 21.4 | % | 18.7 | % | 18.7 | % | ||||
Depreciation and amortization - segment | 34 | 31 | 103 | 92 | ||||||||
Depreciation and amortization - non-operating
|
2 | 2 | 11 | 6 | ||||||||
EBITDA, as adjusted | $ | 421 | $ | 458 | $ | 1,303 | $ | 1,095 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
2021 | 2020 | Change | 2021 | 2020 | Change | |||||||
North American | ||||||||||||
Net sales | $ | 1,753 | $ | 1,599 | 10 | % | $ | 4,999 | $ | 4,337 | 15 | % |
Operating profit, as reported | $ | 332 | $ | 368 | $ | 1,010 | $ | 899 | ||||
Operating margin, as reported | 18.9 | % | 23.0 | % | 20.2 | % | 20.7 | % | ||||
Rationalization charges | - | 1 | 2 | 8 | ||||||||
Accelerated depreciation related to rationalization activity
|
- | - | - | 1 | ||||||||
Operating profit, as adjusted | 332 | 369 | 1,012 | 908 | ||||||||
Operating margin, as adjusted | 18.9 | % | 23.1 | % | 20.2 | % | 20.9 | % | ||||
Depreciation and amortization | 22 | 21 | 66 | 60 | ||||||||
EBITDA, as adjusted | $ | 354 | $ | 390 | $ | 1,078 | $ | 968 | ||||
International | ||||||||||||
Net sales | $ | 451 | $ | 384 | 17 | % | $ | 1,354 | $ | 991 | 37 | % |
Operating profit, as reported | $ | 82 | $ | 82 | $ | 259 | $ | 159 | ||||
Operating margin, as reported | 18.2 | % | 21.4 | % | 19.1 | % | 16.0 | % | ||||
Depreciation and amortization | 12 | 10 | 37 | 32 | ||||||||
EBITDA | $ | 94 | $ | 92 | $ | 296 | $ | 191 | ||||
Total | ||||||||||||
Net sales | $ | 2,204 | $ | 1,983 | 11 | % | $ | 6,353 | $ | 5,328 | 19 | % |
Operating profit, as reported - segment | $ | 414 | $ | 450 | $ | 1,269 | $ | 1,058 | ||||
General corporate expense, net | (29) | (26) | (82) | (70) | ||||||||
Operating profit, as reported | 385 | 424 | 1,187 | 988 | ||||||||
Operating margin, as reported | 17.5 | % | 21.4 | % | 18.7 | % | 18.5 | % | ||||
Rationalization charges - segment | - | 1 | 2 | 8 | ||||||||
Accelerated depreciation related to rationalization activity
|
- | - | - | 1 | ||||||||
Operating profit, as adjusted | 385 | 425 | 1,189 | 997 | ||||||||
Operating margin, as adjusted | 17.5 | % | 21.4 | % | 18.7 | % | 18.7 | % | ||||
Depreciation and amortization - segment | 34 | 31 | 103 | 92 | ||||||||
Depreciation and amortization - non-operating
|
2 | 2 | 11 | 6 | ||||||||
EBITDA, as adjusted | $ | 421 | $ | 458 | $ | 1,303 | $ | 1,095 |