INDUSTRY NEWS

Masco Corporation Reports $3 Million Profit in Second Quarter

07/28/2010

TAYLOR, MI -- Masco Corporation reported that it earned $3 million during its second quarter, on net sales of $2 billion.

The company said it enjoyed increased sales volume of plumbing products, windows and paints and stains, and a more favorable product mix of paints and stains. Second quarter 2010 results were also positively affected cost savings initiatives. However, Masco said it experienced lower sales volume of cabinets and the suffered from a competitive pricing environment.

"We had a solid second quarter in terms of operating performance," said Masco's CEO Tim Wadhams. "If we exclude charges for business rationalizations and financial assets, and normalize our tax rate at 36 percent, many of our key measures show nice improvement compared to second quarter of 2009. Gross margins and operating margins would have exceeded 28 percent and eight percent, respectively, the highest levels achieved on an adjusted basis, since 2008. In addition, EPS for second quarter of 2010, adjusted for the items above, would have approximated $.16 per common share. Second quarter of 2010 also includes additional interest expense and a change in currency transaction impact from gains to losses which, in aggregate, reduced earnings by $.05 per common share compared to second quarter of 2009. Innovative new products drove market share gains and we continued to drive strong incremental margins in the quarter.

Outlook 2010
"After a relatively slow start to the year, we were encouraged that March and April 2010 sales were up high single digits compared to 2009. Since then, economic activity related to our markets, particularly consumer spending and new home building has slowed and our business has slowed," said Tim Wadhams.

The company continues to be concerned about foreclosure activity and anticipates that expenditures on repair and remodel activity will be challenged in the second half of 2010. However, the company is confident that the long-term fundamentals for the new home construction and home improvement markets are positive.