Form 8-K - Current report

0000062996false00000629962024-07-252024-07-25

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC  20549

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

 

Date of report (Date of earliest event reported): July 25, 2024

Masco Corporation

(Exact name of Registrant as Specified in Charter)

Delaware			1-5794			38-1794485
(State or Other Jurisdiction of Incorporation)			(Commission File Number)			(I.R.S. Employer Identification No.)

17450 College Parkway,

Livonia,

Michigan

48152

(Address of Principal Executive Offices)

(Zip Code)

[phone]

(Registrant’s telephone number, including area code)

 

    Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class			Trading Symbol			Name of each exchange on which registered
Common Stock, $1.00 par value			MAS			New York Stock Exchange

    Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2).

    ☐ Emerging growth company

    If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

---

Item 2.02.  Results of Operations and Financial Condition.

 

Attached and incorporated herein by reference as Exhibit 99 is a copy of the press release dated July 25, 2024 reporting Masco Corporation’s financial results for the second quarter 2024 and certain other information and supplemental information prepared for use in connection with the financial results for the second quarter 2024. On July 25, 2024, Masco Corporation will hold an investor conference call and webcast to discuss financial results for the second quarter 2024.

 

This information, including Exhibit 99 attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of that section.

 

Item 9.01.  Financial Statements and Exhibits.

 

(d) Exhibits.

 

99  Press Release of Masco Corporation dated July 25, 2024 reporting Masco Corporation’s financial results for the second quarter 2024 and certain other information and supplemental information prepared for use in connection with the financial results for the second quarter 2024.

104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

			MASCO CORPORATION
			By:			/s/ Richard J. Westenberg
			Name:			Richard J. Westenberg
			Title:			Vice President, Chief Financial Officer and Treasurer

July 25, 2024

2

Exhibit 99

 

MASCO CORPORATION REPORTS SECOND QUARTER 2024 RESULTS

Highlights

•Net sales decreased 2 percent to $2,091 million

•Operating profit decreased 1 percent to $397 million; adjusted operating profit decreased 1 percent to $399 million

•Operating profit margin increased 10 basis points to 19.0 percent; adjusted operating profit margin increased 10 basis points to 19.1 percent

•Earnings per share was $1.17 per share; adjusted earnings per share grew 1 percent to $1.20 per share

•Repurchased 2.0 million shares for $143 million

•Expect 2024 earnings per share in the range of $4.03 - $4.18 per share, and on an adjusted basis, $4.05 - $4.20 per share

LIVONIA, Mich. (July 25, 2024) - Masco Corporation (NYSE: MAS), one of the world’s leading manufacturers of branded home improvement and building products, reported its second quarter 2024 results.

2024 Second Quarter Results

•On a reported basis, compared to second quarter 2023:

•Net sales decreased 2 percent to $2,091 million; in local currency and excluding acquisitions, net sales decreased 2 percent

◦Plumbing Products’ net sales increased 2 percent; in local currency and excluding acquisitions, net sales increased 1 percent

◦Decorative Architectural Products’ net sales decreased 7 percent

◦In local currency, North American and International sales both decreased 1 percent

•Gross margin increased 130 basis points to 37.5 percent from 36.2 percent

•Operating profit decreased 1 percent to $397 million from $403 million

•Operating margin increased 10 basis points to 19.0 percent from 18.9 percent

•Net income increased to $1.17 per share, compared to $1.16 per share

•Compared to second 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 140 basis points to 37.6 percent from 36.2 percent

•Operating profit decreased 1 percent to $399 million from $404 million

•Operating margin increased 10 basis points to 19.1 percent from 19.0 percent

•Net income increased 1 percent to $1.20 per share, compared to $1.19 per share

•Liquidity at the end of the second quarter was $1,398 million (including availability under our revolving credit facility)

“During the first half of this year, we continued to deliver solid results and shareholder value, despite a challenging environment, through the strength of our operating performance,” said Masco President and CEO, Keith Allman. “In the second quarter, we delivered strong adjusted operating profit margin of 19.1 percent and grew adjusted earnings per share by 1 percent. Additionally, our capital allocation strategy enabled us to return $206 million to shareholders though dividends and share repurchases.”

“In the second half of the year, we anticipate ongoing demand headwinds as market conditions remain challenged. However, with our continued focus on execution and operational efficiencies, we are well positioned to drive operating margin expansion for the full year. Additionally, we remain confident in the long-term fundamentals of the repair and remodel market and the strength of our brands and product portfolio,” said Allman. “We now anticipate our 2024 adjusted earnings per share to be in the range of $4.05 to $4.20 per share, compared to our previous expectations of $4.00 to $4.25 per share.”

1

---

Dividend Declaration

Masco’s Board of Directors declared a quarterly dividend of $0.29 per share, payable on August 19, 2024 to shareholders of record on August 2, 2024.

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 second 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 Thursday, July 25, 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 800-549-8228 or 646-564-2877. Please use the conference identification number 45864.

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 888-660-6264 or 646-517-3975. Please use the playback passcode 45864#. The telephone replay will be available approximately two hours after the end of the call and continue through August 25, 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.

Investor Contact

Robin Zondervan

Vice President, Investor Relations and FP&A

313.792.5500

[e-mail]

# # #

2

---

MASCO CORPORATION

Condensed Consolidated Statements of Operations - Unaudited

For the Three and Six Months Ended June 30, 2024 and 2023

(in millions, except per common share data)

			Three Months Ended June 30,												Six Months Ended June 30,
			2024						2023						2024						2023
Net sales			$	2,091					$	2,127					$	4,017					$	4,106
Cost of sales			1,306						1,358						2,547						2,668
Gross profit			785						769						1,470						1,438
Selling, general and administrative expenses			388						366						755						720
Operating profit			397						403						715						718
Other income (expense), net:
Interest expense			(26)						(28)						(50)						(56)
Other, net			(5)						(1)						(10)						(3)
			(31)						(29)						(61)						(59)
Income before income taxes			366						374						655						659
Income tax expense			94						96						154						160
Net income			272						278						501						499
Less: Net income attributable to noncontrolling interest			14						15						28						31
Net income attributable to Masco Corporation			$	258					$	263					$	473					$	468
Income per common share attributable to Masco Corporation (diluted):
Net income			$	1.17					$	1.16					$	2.14					$	2.07
Average diluted common shares outstanding			220						226						221						226

 

Historical information is available on our website.

Amounts may not add due to rounding.

3

---

MASCO CORPORATION

Exhibit A: Reconciliations - Unaudited

For the Three and Six Months Ended June 30, 2024 and 2023

(dollars in millions)

			Three Months Ended June 30,												Six Months Ended June 30,
			2024						2023						2024						2023
Gross Profit, Selling, General and Administrative Expenses, and Operating Profit Reconciliations
Net sales			$	2,091					$	2,127					$	4,017					$	4,106
Gross profit, as reported			$	785					$	769					$	1,470					$	1,438
Rationalization charges (income) (1)			1						1						5						(3)
Gross profit, as adjusted			$	786					$	770					$	1,475					$	1,435
Gross margin, as reported			37.5		%				36.2		%				36.6		%				35.0		%
Gross margin, as adjusted			37.6		%				36.2		%				36.7		%				34.9		%
Selling, general and administrative expenses, as reported			$	388					$	366					$	755					$	720
Rationalization charges			1						—						1						1
Selling, general and administrative expenses, as adjusted			$	387					$	366					$	754					$	719
Selling, general and administrative expenses as a percent of net sales, as reported			18.6		%				17.2		%				18.8		%				17.5		%
Selling, general and administrative expenses as a percent of net sales, as adjusted			18.5		%				17.2		%				18.8		%				17.5		%
Operating profit, as reported			$	397					$	403					$	715					$	718
Rationalization charges (income) (1)			2						1						6						(2)
Operating profit, as adjusted			$	399					$	404					$	721					$	716
Operating margin, as reported			19.0		%				18.9		%				17.8		%				17.5		%
Operating margin, as adjusted			19.1		%				19.0		%				17.9		%				17.4		%

(1) Represents income for the six months ended June 30, 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.

4

---

MASCO CORPORATION

Exhibit A: Reconciliations - Unaudited

For the Three and Six Months Ended June 30, 2024 and 2023

(in millions, except per common share data)

			Three Months Ended June 30,												Six Months Ended June 30,
			2024						2023						2024						2023
Income Per Common Share Reconciliations
Income before income taxes, as reported			$	366					$	374					$	655					$	659
Rationalization charges (income) (1)			2						1						6						(2)
Realized (gains) from private equity funds			—						—						—						(1)
Income before income taxes, as adjusted			368						375						660						656
Tax at 24.5% rate			(90)						(92)						(162)						(161)
Less: Net income attributable to noncontrolling interest			14						15						28						31
Net income, as adjusted			$	264					$	268					$	470					$	464
Net income per common share, as adjusted			$	1.20					$	1.19					$	2.13					$	2.05
Average diluted common shares outstanding			220						226						221						226

(1) Represents income for the six months ended June 30, 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			$	4.03					$	4.18
Rationalization charges			0.02						0.02
Net income per common share, as adjusted			$	4.05					$	4.20

    

Historical information is available on our website.

Amounts may not add due to rounding.

5

---

MASCO CORPORATION

Condensed Consolidated Balance Sheets and Other Financial Data - Unaudited

June 30, 2024 and December 31, 2023

(dollars in millions)

						June 30, 2024						December 31, 2023
Balance Sheet
Assets
Current assets:
Cash and cash investments						$	398					$	634
Receivables						1,314						1,090
Inventories						1,057						1,022
Prepaid expenses and other						129						110
Total current assets						2,898						2,856
Property and equipment, net						1,116						1,121
Goodwill						601						604
Other intangible assets, net						359						377
Operating lease right-of-use assets						254						268
Other assets						137						139
Total assets						$	5,365					$	5,363
Liabilities
Current liabilities:
Accounts payable						$	924					$	840
Notes payable						3						3
Accrued liabilities						718						852
Total current liabilities						1,645						1,695
Long-term debt						2,945						2,945
Noncurrent operating lease liabilities						245						258
Other liabilities						347						349
Total liabilities						5,183						5,247
Redeemable noncontrolling interest						—						18
Equity						182						98
Total liabilities and equity						$	5,365					$	5,363

			As of June 30,
			2024						2023
Other Financial Data
Working capital days
Receivable days			54						54
Inventory days			82						80
Payable days			71						70
Working capital			$	1,447					$	1,557
Working capital as a % of sales (LTM)			18.4		%				18.9		%

Historical information is available on our website.

Amounts may not add due to rounding.

6

---

MASCO CORPORATION

Condensed Consolidated Statements of Cash Flows and Other Financial Data - Unaudited

For the Six Months Ended June 30, 2024 and 2023

(dollars in millions)

			Six Months Ended June 30,
			2024						2023
Cash Flows From (For) Operating Activities:
Cash provided by operating activities			$	648					$	632
Working capital changes			(395)						(184)
Net cash from operating activities			252						448
Cash Flows From (For) Financing Activities:
Purchase of Company common stock			(290)						(81)
Cash dividends paid			(128)						(129)
Dividends paid to noncontrolling interest			(12)						(49)
Purchase of redeemable noncontrolling interest			(15)						—
Proceeds from short-term borrowings			—						77
Payment of term loan			—						(200)
Proceeds from the exercise of stock options			75						23
Employee withholding taxes paid on stock-based compensation			(33)						(23)
Decrease in debt, net			(1)						(4)
Net cash for financing activities			(404)						(386)
Cash Flows From (For) Investing Activities:
Capital expenditures			(74)						(133)
Acquisition of business			(4)						—
Other, net			(1)						(4)
Net cash for investing activities			(80)						(137)
Effect of exchange rate changes on cash and cash investments			(5)						3
Cash and Cash Investments:
Decrease for the period			(236)						(72)
At January 1			634						452
At June 30			$	398					$	380

 

			As of June 30,
			2024						2023
Liquidity
Cash and cash investments			$	398					$	380
Revolver availability			1,000						1,000
Total Liquidity			$	1,398					$	1,380

 

Historical information is available on our website.

Amounts may not add due to rounding.

7

---

MASCO CORPORATION

Segment Data - Unaudited

For the Three and Six Months Ended June 30, 2024 and 2023

(dollars in millions)

			Three Months Ended June 30,																		Six Months Ended June 30,
			2024						2023						Change						2024						2023						Change
Plumbing Products
Net sales			$	1,253					$	1,225					2		%				$	2,445					$	2,447					—		%
Operating profit, as reported			$	247					$	244											$	472					$	450
Operating margin, as reported			19.7		%				19.9		%										19.3		%				18.4		%
Rationalization charges (income)			2						1												5						(3)
Operating profit, as adjusted			249						245												477						447
Operating margin, as adjusted			19.9		%				20.0		%										19.5		%				18.3		%
Depreciation and amortization			27						25												53						50
EBITDA, as adjusted			$	276					$	270											$	530					$	497
Decorative Architectural Products
Net sales			$	838					$	902					(7)		%				$	1,572					$	1,659					(5)		%
Operating profit, as reported			$	174					$	180											$	299					$	312
Operating margin, as reported			20.8		%				20.0		%										19.0		%				18.8		%
Rationalization charges			—						—												1						1
Operating profit, as adjusted			174						180												299						313
Operating margin, as adjusted			20.8		%				20.0		%										19.0		%				18.9		%
Depreciation and amortization			9						9												19						17
EBITDA, as adjusted			$	184					$	189											$	318					$	330
Total
Net sales			$	2,091					$	2,127					(2)		%				$	4,017					$	4,106					(2)		%
Operating profit, as reported - segment			$	421					$	424											$	771					$	762
General corporate expense, net			(24)						(21)												(55)						(44)
Operating profit, as reported			397						403												715						718
Operating margin, as reported			19.0		%				18.9		%										17.8		%				17.5		%
Rationalization charges (income) - segment			2						1												6						(2)
Operating profit, as adjusted			399						404												721						716
Operating margin, as adjusted			19.1		%				19.0		%										17.9		%				17.4		%
Depreciation and amortization - segment			36						34												72						67
Depreciation and amortization - other			2						1												4						3
EBITDA, as adjusted			$	437					$	439											$	797					$	786

Historical information is available on our website.

Amounts may not add due to rounding.

8

---

MASCO CORPORATION

North American and International Data - Unaudited

For the Three and Six Months Ended June 30, 2024 and 2023

(dollars in millions)

			Three Months Ended June 30,																		Six Months Ended June 30,
			2024						2023						Change						2024						2023						Change
North American
Net sales			$	1,695					$	1,718					(1)		%				$	3,220					$	3,273					(2)		%
Operating profit, as reported			$	360					$	358											$	645					$	624
Operating margin, as reported			21.2		%				20.8		%										20.0		%				19.1		%
Rationalization charges (income)			1						1												4						(2)
Operating profit, as adjusted			361						359												649						622
Operating margin, as adjusted			21.3		%				20.9		%										20.2		%				19.0		%
Depreciation and amortization			23						22												47						43
EBITDA, as adjusted			$	385					$	381											$	695					$	665
International
Net sales			$	397					$	409					(3)		%				$	797					$	833					(4)		%
Operating profit, as reported			$	61					$	66											$	126					$	138
Operating margin, as reported			15.4		%				16.1		%										15.8		%				16.6		%
Rationalization charges			1						—												2						—
Operating profit, as adjusted			62						66												128						138
Operating margin, as adjusted			15.6		%				16.1		%										16.1		%				16.6		%
Depreciation and amortization			13						12												25						24
EBITDA, as adjusted			$	75					$	78											$	153					$	162
Total
Net sales			$	2,091					$	2,127					(2)		%				$	4,017					$	4,106					(2)		%
Operating profit, as reported - segment			$	421					$	424											$	771					$	762
General corporate expense, net			(24)						(21)												(55)						(44)
Operating profit, as reported			397						403												715						718
Operating margin, as reported			19.0		%				18.9		%										17.8		%				17.5		%
Rationalization charges (income) - segment			2						1												6						(2)
Operating profit, as adjusted			399						404												721						716
Operating margin, as adjusted			19.1		%				19.0		%										17.9		%				17.4		%
Depreciation and amortization - segment			36						34												72						67
Depreciation and amortization - other			2						1												4						3
EBITDA, as adjusted			$	437					$	439											$	797					$	786

Historical information is available on our website.

Amounts may not add due to rounding.

9

Cover	Jul. 25, 2024
Cover [Abstract]
Document Type	8-K
Document Period End Date	Jul. 25, 2024
Entity Registrant Name	Masco Corporation
Entity Incorporation, State or Country Code	DE
Entity File Number	1-5794
Entity Tax Identification Number	38-1794485
Entity Address, Address Line One	17450 College Parkway,
Entity Address, City or Town	Livonia,
Entity Address, State or Province	MI
Entity Address, Postal Zip Code	48152
City Area Code	313
Local Phone Number	274-7400
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $1.00 par value
Trading Symbol	MAS
Security Exchange Name	NYSE
Entity Emerging Growth Company	false
Entity Central Index Key	0000062996
Amendment Flag	false

---