Masco Corporation Reports Fourth Quarter & 2020 Year-End Results

Masco Corporation, one of the world’s leading manufacturers of branded home improvement and building products, reported its results for the fourth quarter and full year of 2020.

2020 Fourth Quarter Commentary

On a reported basis, compared to fourth quarter 2019:

– Net sales increased 13 percent to $1,860 million; in local currency, net sales increased 12 percent

– In local currency, North American sales increased 13 percent and international sales increased 8 percent

– Gross margin increased 100 basis points to 35.5 percent from 34.5 percent

– Operating margin increased 90 basis points to 16.5 percent from 15.6 percent

– Income from continuing operations increased to $0.73 per share, compared to $0.56 per share

Compared to fourth quarter 2019, results for key financial measures, as adjusted for certain items (see Exhibit A) and with a normalized tax rate of 25 percent (reduced from previously guided normalized tax rate of 26%), were as follows:

– Gross margin increased 100 basis points to 35.6 percent from 34.6 percent

– Operating margin increased 90 basis points to 16.6 percent from 15.7 percent

– Income from continuing operations increased to $0.75 per share, compared to $0.55 per share

Liquidity at the end of the fourth quarter was $2,326 million (including availability under revolving credit facility)

Plumbing Products’ net sales increased 14 percent (12 percent excluding the impact of foreign currency)

Decorative Architectural Products’ net sales increased 12 percent

“We experienced robust demand in the fourth quarter, operated safely and efficiently, and finished the year strong,” said Keith Allman, Masco’s President and CEO. “We continued to successfully execute our strategy, which resulted in earnings per share growth of 36 percent and a net sales increase of 13 percent. We also returned $162 million to shareholders through share repurchases and dividends during the fourth quarter, and recently completed three bolt-on acquisitions, which we expect to contribute approximately 3% top-line growth in 2021.”

2020 Full Year Key Results

Sales for the year increased 7 percent to $7,188 million; in local currency, sales increased 7 percent

Operating profit grew 19 percent to $1,295 million; adjusted operating profit grew 18 percent to $1,306 million

Returned $872 million to shareholders through share repurchases and dividends

Earnings per share from continuing operations for the year grew 38 percent to $3.04 per share; adjusted earnings per share from continuing operations grew 37 percent to $3.12 per share

2020 Full Year Commentary

On a reported basis, compared to full year 2019:

– Net sales increased 7 percent to $7,188 million

– In local currency, North American sales increased 9 percent and international sales decreased 1 percent

– Gross margin increased 60 basis points to 36.0 percent from 35.4 percent

– Operating margin increased 180 basis points to 18.0 percent from 16.2 percent

– Operating profit increased 19 percent to $1,295 million from $1,088 million

– Income from continuing operations increased 38 percent to $3.04 per share compared to $2.20 per share

Compared to full year 2019, results for key financial measures, as adjusted for certain items (see Exhibit A) and with a normalized tax rate of 25 percent, were as follows:

– Gross margin increased 60 basis points to 36.1 percent from 35.5 percent

– Operating margin increased 170 basis points to 18.2 percent from 16.5 percent

– Operating profit increased 18 percent to $1,306 million from $1,110 million

– Income from continuing operations increased 37 percent to $3.12 per share compared to $2.28 per share

“We closed out 2020 on a high note and our results for the year demonstrate the power of Masco’s differentiated portfolio of leading repair and remodel brands, strong cash generation capabilities, and most of all, the commitment of our people,” said Allman. “In an ever-changing environment, our employees continued to meet the needs of our customers and deliver value for our shareholders. Thanks to their dedicated efforts, we surpassed our previously guided expectation of achieving $2.80 – $3.00 of adjusted earnings per share in 2021, a full year earlier than planned.”

“We anticipate the demand for our products will remain strong in 2021,” said Allman. “The key housing fundamentals that drive our business, such as home price appreciation and existing home turnover, improved during the second half of 2020, and consumers are clearly viewing the value of their homes more favorably in light of the pandemic. Given these dynamics, we anticipate 2021 adjusted earnings per share to range from $3.25 to $3.45 per share.”

Dividend and Share Repurchase Authorization

Masco’s Board of Directors announced its intention to increase the Company’s annual dividend to $0.94 per share from $0.56 per share, a 68 percent increase, beginning in the second quarter of 2021.

The Board also approved a new $2.0 billion share repurchase authorization effective February 10, 2021, replacing the existing authorization.

“The anticipated dividend increase we’ve announced today, along with the new $2.0 billion share repurchase authorization, underscores our strong financial position and the Board’s confidence in our future,” concluded Allman.

For the full fourth quarter results, click here.

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; 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.

Contact:

David Chaika – Vice President, Treasurer & Investor Relations – david_chaika@mascohq.com – (313) 792-5500

Source: Masco Corporation