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MAS · Masco

30 filings

10-K

MAS 10-K Annual Reports

Masco - 30 annual reports

Filing record · 2016–202610-K1110-Q338-K95

2025
Masco Annual Report, Year Ended Dec 31, 2025
Masco Corporation (MAS) reported 2025 net sales of $7,562 million, down three percent from $7,828 million in 2024, with lower sales volume partially offset by higher net selling prices of plumbing products. Gross margin declined to 35.4 percent from 36.2 percent, and operating profit fell eight percent to $1,248 million, with an operating profit margin of 16.5 percent versus 17.4 percent. Net income attributable to Masco Corporation was $810 million, and diluted income per common share rose to $3.86 from $3.76, reflecting the lower share count after buybacks. Net cash from operating activities was $1,022 million, and capital expenditures were $156 million. The Decorative Architectural Products segment was the main drag, with net sales down 14 percent to $2,570 million and operating profit down 19 percent to $443 million, driven by lower volume and the divestiture of Kichler Lighting. Plumbing Products net sales rose three percent to $4,992 million, but operating profit slipped two percent to $895 million under higher commodity and tariff costs. The Home Depot accounted for approximately 38 percent of consolidated net sales in 2025, and the company flagged ongoing tariff, commodity and lower-demand pressures. For capital allocation, the Board authorized a new $2.0 billion share repurchase program on February 10, 2026, replacing the 2022 program, and the company expects to use approximately $600 million for repurchases in 2026 outside of any acquisitions. The quarterly dividend was raised to $0.32 per share, with the intention to increase the annual dividend three percent to $1.28. Total debt as a percent of total capitalization was 97 percent at year-end, and the company had no borrowings outstanding under its $1.0 billion revolving credit agreement.
Feb 10, 2026
2024
Masco Annual Report, Year Ended Dec 31, 2024
Masco Corporation and its subsidiaries, a global designer, manufacturer and distributor of branded home improvement and building products (including BEHR paint, DELTA and HANSGROHE faucets, LIBERTY hardware and HOT SPRING spas), reported 2024 net sales of $7,828 million, down two percent from $7,967 million in 2023. Gross margin rose to 36.2 percent from 35.6 percent, and operating profit was $1,363 million, up one percent. Net income attributable to Masco Corporation was $822 million, down nine percent, and diluted income per share was $3.76 versus $4.02, down six percent. The Decorative Architectural Products segment's sales fell five percent, largely due to the third-quarter 2024 divestiture of Kichler Lighting, which produced an $88 million loss, while Plumbing Products sales were flat and its operating profit rose six percent. Cash from operating activities was $1,075 million, down from $1,413 million. Masco repurchased and retired 10.0 million shares for approximately $757 million, paid $254 million in cash dividends, and declared a first-quarter 2025 quarterly dividend of $0.31 per share, with the intention to raise the annual dividend seven percent to $1.24. The company expects to use approximately $600 million for share repurchases in 2025, outside of any acquisitions. Total debt as a percent of total capitalization was 102 percent at year-end 2024, compared with 97 percent a year earlier, and total equity was negative $53 million. The Home Depot accounted for approximately 38 percent of consolidated net sales, and management reported effective internal control over financial reporting as of December 31, 2024.
Feb 11, 2025
2023
Masco Annual Report, Year Ended Dec 31, 2023
Masco Corporation's 2023 results show lower demand offset by higher pricing. Net sales were $7,967 million, down eight percent from $8,680 million in 2022, as lower sales volume reduced sales by 11 percent and higher net selling prices added three percent. Gross margin rose to 35.6 percent from 31.3 percent, and operating profit was $1,348 million versus $1,297 million, with operating profit margin at 16.9 percent versus 14.9 percent. Net income attributable to Masco Corporation was $908 million, or $4.02 per diluted share, compared with $844 million and $3.63 a year earlier. The filing cites cost savings initiatives, lower transportation costs, a $40 million insurance settlement and lower excess and obsolete inventory charges as margin support. Cash flow and balance sheet items improved. Net cash from operating activities was $1,413 million, up from $840 million, driven by operating profit and lower inventory. Masco repurchased and retired 6.2 million shares for about $356 million, paid $257 million in cash dividends, and acquired Sauna360 Group Oy for about $136 million net of cash acquired. Total debt as a percent of total capitalization fell to 97 percent from 109 percent, and the $200 million 364-day term loan was repaid at maturity. The company expects capital expenditures of about $200 million and share repurchases of about $600 million in 2024, excluding acquisitions. Concentration and demand remain the key risks. The Home Depot accounted for $3.1 billion, or approximately 39 percent, of 2023 consolidated net sales, and the Behr brand grants The Home Depot exclusivity in North American retail. Architectural coatings were about 32 percent of consolidated net sales in 2023. The filing also reports a $15 million non-cash impairment charge on a trademark in the Decorative Architectural Products segment, and the company declared a first-quarter 2024 dividend of $0.29 per share, an intended annual increase of two percent to $1.16.
Feb 8, 2024
2022
Masco Annual Report, Year Ended Dec 31, 2022
Masco Corporation's 2022 Form 10-K reports net sales of $8.68 billion, up from $8.375 billion in 2021, with net sales up four percent overall and six percent excluding acquisitions, divestitures and currency translation. The increase was driven primarily by higher net selling prices, which added nine percent, partially offset by lower sales volume (down three percent) and unfavorable currency translation (down two percent). Gross margin fell to 31.3 percent from 34.2 percent, and operating profit declined to $1.297 billion from $1.405 billion, with operating profit margin at 14.9 percent versus 16.8 percent. Management cites increased commodity and transportation costs, production inefficiencies, lower volume, unfavorable sales mix and higher marketing costs as headwinds. Income from continuing operations attributable to Masco rose to $844 million, or $3.63 diluted per share, compared with $410 million, or $1.62, in 2021, largely because 2021 included a $430 million pension and post-retirement expense and a $168 million debt extinguishment loss. The balance sheet shows total shareholders' deficit of $480 million and total equity of a $262 million deficit at December 31, 2022, with total debt as a percent of total capitalization at 109 percent. Cash and cash investments declined to $452 million from $926 million, and operating cash flow was $840 million. The company repurchased and retired 16.6 million shares for about $914 million, paid $258 million in cash dividends, and declared a first-quarter 2023 quarterly dividend of $0.285 per share, with the intention to raise the annual dividend to $1.14. It anticipates roughly $500 million of share repurchases in 2023 and capital expenditures of about $250 million. Concentration is a key investor consideration: The Home Depot accounted for $3.3 billion, or approximately 38 percent, of consolidated net sales in 2022, and the Behr paint business grants The Home Depot exclusivity in North American retail. Architectural coatings represented approximately 32 percent of consolidated net sales. The filing also notes that management is unable to fully estimate the impact of changing market conditions on future financial condition.
Feb 9, 2023
2021
Masco Annual Report, Year Ended Dec 31, 2021
Masco Corporation reported net sales of $8.4 billion for 2021, up 17 percent from 2020. Excluding acquisitions, divestitures and the effect of currency translation, net sales increased 13 percent. Plumbing Products net sales rose 24 percent to $5.1 billion, and Decorative Architectural Products net sales rose 6 percent to $3.2 billion. Gross margin declined to 34.2 percent from 36.0 percent, as increased commodity, transportation and labor costs more than offset higher volume, favorable net selling prices and cost savings. Operating profit was $1,405 million, with an operating margin of 16.8 percent versus 18.0 percent in 2020. Diluted income per share from continuing operations was $1.62, compared with $3.04 in 2020. Net income was weighed down by non-operating items. Other, net was an expense of $439 million, primarily reflecting $430 million of net periodic pension and post-retirement benefit expense, including a $399 million net settlement loss from terminating the qualified domestic defined-benefit pension plans. Interest expense rose to $278 million, including a $168 million loss on debt extinguishment from early retirement of notes in the first quarter of 2021. Income tax expense was $210 million, with an effective tax rate of 31 percent. Net cash from operating activities was $930 million, and capital expenditures were $128 million. The company returned capital to shareholders, repurchasing 17.6 million shares for approximately $1,026 million in 2021 and paying $211 million in cash dividends. It expects to use approximately $600 million for share repurchases in 2022 and declared a first-quarter 2022 dividend of $0.28 per share, with the intention to increase the annual dividend to $1.12 per share. Total debt was 98 percent of total capitalization at December 31, 2021, up from 87 percent, and total equity was $56 million. The Home Depot accounted for approximately 36 percent of consolidated net sales, or $3.0 billion.
Feb 8, 2022
2020
Masco Annual Report, Year Ended Dec 31, 2020
Masco Corporation, a global leader in branded home improvement and building products, reported net sales of $7.2 billion for 2020, up seven percent from 2019 on higher sales volume in both segments, partly offset by unfavorable net selling prices in Decorative Architectural Products. Operating profit rose to $1.295 billion from $1.088 billion, and income from continuing operations attributable to Masco was $810 million, or $3.04 per diluted share, versus $2.20 in 2019. Net income attributable to Masco was $1.224 billion, helped by $414 million of income from discontinued operations, including the $585 million gain on the sale of the Cabinetry business. Net cash from operating activities was $953 million. The company continued to return capital to shareholders, repurchasing and retiring 18.8 million shares for approximately $727 million in 2020 and increasing its quarterly dividend to $0.14 from $0.135. The Board authorized a new $2.0 billion repurchase program effective February 10, 2021, and management anticipates using approximately $800 million of cash for share repurchases in 2021. Total equity turned positive to $421 million from a deficit of $56 million a year earlier. Long-term debt was $2.792 billion at year end, and the company issued $300 million of 2.0% notes due 2030 and an incremental $100 million of 4.5% notes due 2047 while retiring $400 million of 3.5% notes. Investors should note the concentration of sales with The Home Depot, which accounted for approximately 39 percent of consolidated net sales in 2020, and the continued COVID-19 uncertainty described in the filing. The company also disclosed that its qualified domestic defined-benefit pension plans are expected to be terminated in 2021, with pension expense projected at $470 million for 2021 compared with $30 million in 2020, and a planned contribution of approximately $140 million.
Feb 9, 2021
2019
Masco Annual Report, Year Ended Dec 31, 2019
Masco Corporation, a global designer, manufacturer and distributor of branded home improvement and building products, reported 2019 net sales from continuing operations of $6.71 billion, up from $6.65 billion in 2018, and operating profit of $1.09 billion. Income from continuing operations attributable to Masco Corporation was $639 million, or $2.20 per diluted share, compared with $636 million, or $2.05 per diluted share, in 2018. Net income attributable to Masco Corporation was $935 million, including $296 million from discontinued operations, largely driven by the gain on the Milgard divestiture. The company completed the sales of its Milgard Windows and Doors and UK Window Group businesses in 2019 and entered into a definitive agreement to sell its Masco Cabinetry business for approximately $1.0 billion, with closing expected in the first quarter of 2020. The company operates two segments, Plumbing Products (BEHR-related paint is in Decorative Architectural Products) and Decorative Architectural Products, which include the BEHR paint, DELTA and HANSGROHE faucet, and KICHLER lighting brands. The Home Depot accounted for approximately 37 percent of consolidated net sales in 2019. Total debt as a percent of total capitalization was 102 percent at December 31, 2019, and shareholders' deficit was $56 million on a total equity basis. Cash from operating activities was $833 million, and the company repurchased 20.1 million shares for $896 million during 2019. During 2019 the company increased its quarterly dividend to $0.135 per share from $0.12, and its board authorized a new $2.0 billion share repurchase program in September 2019, with $1.5 billion remaining at year end. Management anticipates using approximately $1.2 billion of cash for share repurchases in 2020.
Feb 11, 2020
2018
Masco Annual Report, Year Ended Dec 31, 2018
Masco Corporation, a global leader in designing, manufacturing and distributing branded home improvement and building products, reported 2018 net sales of $8.36 billion, up from $7.64 billion in 2017, and net income attributable to Masco Corporation of $734 million, or $2.37 per diluted share, versus $533 million and $1.66 in 2017. Results were driven by the March 2018 acquisition of The L.D. Kichler Co. (purchase price $549 million in cash), higher sales volume, and net selling price increases, partly offset by higher commodity costs, logistics and salary expenses, and the inventory step-up from the Kichler acquisition. Operating profit was $1.21 billion (14.5% operating margin, 15.1% as adjusted), and the effective tax rate fell to 25% from 34% reflecting U.S. tax reform. Cash flow from operations was $1.03 billion, and the company repurchased and retired 18.6 million shares for $654 million, paid $134 million in cash dividends, and raised its quarterly dividend to $.12 per share from $.105 in the third quarter. Total debt as a percent of total capitalization was 98% at December 31, 2018, up from 94%, and shareholders' equity was $69 million in total equity. Cash and cash investments were $559 million at year end, and the company anticipates using approximately $600 million for share repurchases and capital expenditures of approximately $200 million in 2019. Management flagged risks including reliance on residential repair and remodel activity, concentrated sales to The Home Depot (approximately 32% of consolidated net sales in 2018), commodity and tariff cost pressures, and foreign currency exposure, with 19% of 2018 sales made outside North America.
Feb 7, 2019
2017
Masco Annual Report, Year Ended Dec 31, 2017
Masco Corporation reported net sales of $7.64 billion for 2017, up 4 percent from 2016, with operating profit of $1.17 billion and net income attributable to Masco Corporation of $533 million, or $1.66 per diluted share. The company attributed the growth to higher sales volume tied to repair and remodel activity and new home construction, net selling price increases in Europe and the U.S., and cost savings initiatives. Plumbing Products was the largest segment, with net sales of $3.74 billion and operating profit of $698 million. Decorative Architectural Products, led by BEHR paint, had net sales of $2.21 billion and operating profit of $434 million. Cabinetry Products net sales fell 4 percent to $934 million, and Windows and Other Specialty Products were flat at $770 million after a $31 million warranty charge in 2016. The company's balance sheet and cash flow position improved during the year. Total debt as a percent of total capitalization was 95 percent at December 31, 2017, down from 104 percent a year earlier. Net cash from operating activities was $751 million, and the company repurchased 9.2 million shares for $331 million, leaving about $1.3 billion under its 2017 authorization. The quarterly dividend was increased to $0.105 per share from $0.10 in the third quarter. Masco also signed a definitive agreement to acquire The L.D. Kichler Co. for approximately $550 million in cash, expected to close in the first quarter of 2018. The filing highlights concentration and operating risks. The Home Depot accounted for $2.5 billion of net sales, approximately 33 percent of the consolidated total. The company also disclosed operational issues at its U.S. window business, Milgard, and an ERP system rollout at Delta Faucet Company planned for the second quarter of 2018. Management expects the 2018 effective tax rate to be approximately 26 percent, reflecting U.S. tax reform.
Feb 8, 2018
2016
Masco Annual Report, Year Ended Dec 31, 2016
Masco Corporation, a global leader in branded home improvement and building products, reported 2016 net sales of $7.36 billion, up from $7.14 billion in 2015, and operating profit of $1.05 billion versus $914 million a year earlier. Net income attributable to Masco Corporation was $491 million, or $1.47 diluted earnings per share from continuing operations, compared with $1.03 in 2015. Growth was driven by higher sales volume in plumbing products, paints and coatings, and builders' hardware, along with favorable commodity-cost relationships and cost savings, partly offset by higher warranty costs (including a $31 million increase in the Windows and Other Specialty Products segment), ERP implementation costs and currency translation. Operating profit margin, as reported, rose to 14.3 percent from 12.8 percent. The Plumbing Products segment was the largest contributor, with net sales of $3.53 billion and operating profit of $642 million, while the Windows and Other Specialty Products segment posted an operating loss of $3 million. The Home Depot accounted for approximately 34 percent of consolidated net sales in 2016, and the filing describes it as the largest customer and the principal outlet for BEHR paint. Total shareholders' deficit was $103 million at year-end, with total debt at 104 percent of total capitalization, versus 98 percent in 2015. Financial flexibility improved during 2016: Masco issued $900 million of new notes, used the proceeds with cash on hand to retire $1.3 billion of notes, and ended the year with cash, cash investments and short-term deposits of about $1.2 billion and no borrowings under its $750 million revolving credit agreement. The company repurchased nearly 15 million shares for $459 million and raised its quarterly dividend to $0.10 per share from $0.095. The filing notes that Milgard, its U.S. window business, is experiencing operational issues and that it is implementing a new ERP system, and it expects 2017 capital expenditures of approximately $200 million.
Feb 9, 2017
2015
Masco Annual Report, Year Ended Dec 31, 2015
Masco Corporation's 2015 Form 10-K reports net sales of $7.14 billion, up from $7.01 billion in 2014, with operating profit of $914 million versus $721 million the prior year. Operating profit as adjusted for rationalization charges and other items was $927 million, and the operating profit margin as reported rose to 12.8 percent from 10.3 percent. Net income attributable to Masco Corporation was $355 million, compared with $856 million in 2014, which included a $529 million tax benefit from the release of a valuation allowance. Diluted income from continuing operations per share was $1.03, versus $2.28 in 2014. The most significant event of the year was the June 30, 2015 spin-off of the Installation and Other Services businesses as TopBuild Corp., which the filing describes as making the company less dependent on new home construction and less cyclical, and increasing the share of sales from international markets. The spin-off reduced shareholders' equity to a deficit of $135 million attributable to Masco Corporation, from $924 million a year earlier, and retained earnings were reduced by $828 million. Total assets fell to $5.68 billion from $7.21 billion. Long-term debt declined to $2.42 billion from $2.92 billion, and total debt as a percent of total capitalization was 98 percent, compared with 75 percent a year earlier. Cash flow from operations was $699 million, and the company repurchased and retired 17 million shares for $456 million. Cash, cash investments and short-term bank deposits totaled approximately $1.7 billion at year-end, of which $630 million was held in foreign subsidiaries. Management plans to pay down $300 million to $500 million of debt over the next several quarters and expects to repurchase up to $500 million of common stock in 2016. The filing states that The Home Depot, the largest customer, accounted for net sales of $2.4 billion, or approximately 33 percent of consolidated net sales.
Feb 12, 2016
2014
Masco Annual Report, Year Ended Dec 31, 2014
Masco Corporation manufactures, distributes and installs home improvement and building products, with about 81 percent of 2014 sales generated by North American operations. Net sales for 2014 were $8.5 billion, up from $8.2 billion in 2013 (4 percent growth as reported), and operating profit was $788 million versus $673 million in 2013. Net income attributable to Masco Corporation was $856 million, or $2.38 per diluted share, compared with $288 million in 2013. The result was materially boosted by a $529 million income tax benefit from releasing the valuation allowance on deferred tax assets, which drove the effective tax rate to a 58 percent benefit. Operating profit as adjusted for rationalization charges, spin-off costs and litigation items was $851 million, with an adjusted operating margin of 10.0 percent. The company is pursuing a plan, announced September 30, 2014, to spin off 100 percent of its Installation and Other Services businesses through a tax-free stock distribution to shareholders, with completion expected in mid-2015. Cabinets and Related Products remained the weak spot, posting an operating loss of $62 million in 2014. The Home Depot, the largest customer, accounted for approximately 27 percent of consolidated net sales, with sales of $2.3 billion. Total debt as a percent of total capitalization fell to 75 percent from 81 percent, and the company held approximately $1.7 billion of cash, cash investments and short-term bank deposits at year-end. Capital returns increased: the Board authorized repurchases of up to 50 million shares in September 2014, the quarterly dividend was raised to $.09 from $.075 in the second quarter, and the company repurchased 7 million shares for $158 million during 2014. Management expects to repurchase between $400 million and $500 million of stock in 2015 and anticipates continued improvement in new home construction and repair and remodel activity in North America and internationally.
Feb 13, 2015
2013
Masco Annual Report, Year Ended Dec 31, 2013
Masco Corporation manufactures, distributes and installs home improvement and building products, with about 81 percent of 2013 sales generated by North American operations. Net sales rose to $8.17 billion in 2013 from $7.50 billion in 2012, and operating profit improved to $673 million from $302 million. Income from continuing operations attributable to Masco Corporation was $282 million, or $.78 per diluted share, compared with a loss of $53 million in 2012. The company reported net cash from operating activities of $645 million and ended the year with approximately $1.5 billion in cash, cash investments and short-term bank deposits. Management said it is focused on four strategic initiatives: product leadership, cost reduction, improving underperforming businesses, and strengthening the balance sheet. The filing reports that Cabinets and Related Products and Installation and Other Services returned to profitability in 2013. Total debt as a percent of total capitalization fell to 82 percent from 87 percent, and the company repaid $200 million of 7.125% notes in August 2013. The Credit Agreement entered in March 2013 provides a $1.25 billion commitment, with no borrowings outstanding at year-end. The company still carries a full valuation allowance against U.S. Federal deferred tax assets, and it said that reversal of all or a portion of up to approximately $550 million could occur as early as the second half of 2014. Leadership also changed: Timothy Wadhams retired as President and CEO effective February 14, 2014, and Keith J. Allman was elected to succeed him and join the Board. Concentration risk is significant, since The Home Depot accounted for $2.3 billion, or approximately 28 percent, of 2013 consolidated net sales. Investors should weigh the recovery in new home construction and repair and remodel activity against this customer concentration and the remaining valuation allowance.
Feb 14, 2014
2012
Masco Annual Report, Year Ended Dec 31, 2012
Masco Corporation's 2012 Form 10-K reports net sales of $7.745 billion, up from $7.467 billion in 2011, and an operating profit of $271 million, compared with an operating loss of $295 million in 2011. The company still posted a loss from continuing operations attributable to Masco Corporation of $76 million, or $(.22) per share, and a net loss attributable to Masco Corporation of $114 million. Results were helped by a more favorable relationship between selling prices and commodity costs, higher sales volume in North American plumbing and installation, and business rationalization savings, while the Cabinets and Related Products segment remained loss-making at an operating loss of $120 million. Impairment charges fell to $42 million in 2012 from $494 million in 2011, and the company recorded a $77 million charge for litigation settlements, primarily in the Installation and Other Services segment. Balance sheet and liquidity were a focus. Management reduced debt by retiring $791 million of 5.875% notes in July 2012, partly funded by a $400 million issuance of 5.95% notes due 2022. Cash and cash investments were $1.351 billion at year-end, and total equity fell to $534 million from $742 million. Debt as a percent of total capitalization was 87 percent, up from 84 percent. The company had no borrowings under its $1.25 billion Credit Agreement and reported additional borrowing capacity of up to $873 million. Management stated it was in compliance with all covenants. The filing describes a continuing strategy built on four initiatives: expanding product leadership, reducing costs, improving the Cabinets and Installation businesses, and strengthening the balance sheet. In early February 2013, the company decided to dispose of its Danish ready-to-assemble cabinet business, which had 2012 sales of approximately $250 million and an operating loss of approximately $30 million. The Home Depot accounted for approximately 28 percent of consolidated net sales in 2012, a concentration risk highlighted in the filing.
Feb 15, 2013
2011
Masco Annual Report, Year Ended Dec 31, 2011
Masco Corporation manufactures, distributes and installs home improvement and building products, including faucets, cabinets, architectural coatings and windows, and is one of the largest installers of insulation for new home construction. Approximately 76 percent of 2011 sales came from North American operations. Net sales were $7.47 billion in 2011, essentially flat with $7.49 billion in 2010, while the company reported an operating loss of $295 million and a net loss attributable to Masco Corporation of $575 million, driven largely by $494 million of non-cash pre-tax impairment charges for goodwill and other intangible assets. Shareholders' equity fell to $742 million at December 31, 2011 (total equity, including noncontrolling interest), and long-term debt was $3.22 billion. Cash and cash investments were approximately $1.7 billion at year-end, and the company reported a debt to total capitalization ratio of 84 percent at December 31, 2011. Management cited increased commodity costs, a continuing decline in home values, weak job creation and depressed consumer confidence as factors hindering a housing recovery. The company said it continued to rationalize operations, closing facilities and reducing headcount, and incurred business rationalization costs of $121 million in 2011. Its largest customer, The Home Depot, accounted for $2.0 billion of 2011 sales, approximately 27 percent of consolidated net sales. A Second Amendment to the Credit Agreement, entered February 13, 2012, allows add-back to shareholders' equity of $1.6 billion in 2010 and 2011 non-cash charges and revises the minimum interest coverage ratio to 2.25 to 1.00 through December 31, 2012. The company expects 2012 capital expenditures of approximately $180 million and depreciation and amortization of approximately $219 million, and anticipates rationalization costs of approximately $20 million in 2012. It is cautiously optimistic about 2012 economic trends, noting that housing starts improved in 2011 to 607,000 units, and it states that it believes its strategy should position it for improved results in 2012 even in a flat housing market.
Feb 21, 2012
2010
Masco Annual Report, Year Ended Dec 31, 2010
Masco Corporation manufactures, distributes and installs home improvement and building products, with brand-name leadership positions in faucets, cabinets, architectural coatings and windows, and is one of the largest installers of insulation for new home construction. Approximately 78 percent of 2010 sales were generated by North American operations. The company describes a prolonged and substantial downturn in home improvement and new home construction markets, and it continued business consolidations, plant closures, headcount reductions and other cost initiatives during 2010. Net sales were $7.59 billion in 2010, down from $7.79 billion in 2009, and the company reported an operating loss of $499 million, driven mainly by $721 million of goodwill and other intangible asset impairment charges. Net loss attributable to Masco Corporation was $1.04 billion, or $3.00 per diluted share, including a $371 million non-cash valuation allowance against U.S. Federal deferred tax assets recorded in the fourth quarter. Balance sheet and liquidity are central to the investor picture. Cash and cash investments were $1.72 billion at December 31, 2010, and total debt as a percent of total capitalization rose to 72 percent from 58 percent. Shareholders' equity fell to $1.58 billion total equity from $2.82 billion. Cash from operations was $465 million. The company entered a $1.25 billion Credit Agreement in June 2010, and on February 11, 2011 amended it to allow add-back to shareholders' equity of $986 million of 2010 non-cash charges plus up to $350 million of future non-cash charges, leaving borrowing capacity of approximately $1 billion. Management expects a challenging first half of 2011 and a stronger second half. The Home Depot, the largest customer, accounted for approximately 26 percent of 2010 consolidated net sales ($1.99 billion), and the filing identifies the loss of that business as a material adverse risk. Management expects 2011 business rationalization costs of approximately $65 million and capital expenditures of approximately $230 million.
Feb 18, 2011
2009
Masco Annual Report, Year Ended Dec 31, 2009
Masco Corporation manufactures, distributes and installs home improvement and building products, with about 79 percent of 2009 sales from North American operations. Net sales fell to $7.79 billion in 2009 from $9.48 billion in 2008, and the company reported a net loss attributable to Masco Corporation of $183 million, or $(.53) per share, compared with a net loss of $391 million in 2008. The results reflect a significant downturn in home improvement and new home construction markets, along with non-cash goodwill and intangible impairment charges of $262 million in 2009 and $467 million in 2008. Operating profit was $55 million in 2009 versus $90 million in 2008, and the company reduced its quarterly dividend from $.235 to $.075 per share during 2009. The Home Depot, the largest customer, accounted for approximately 26 percent of 2009 consolidated net sales, at $2.1 billion. Liquidity remained solid, with cash and cash investments of $1.41 billion at December 31, 2009, and cash from operations of $705 million. Management noted some signs of stabilization in the third and fourth quarters of 2009 and expects housing starts to rise to a range of 600,000 to 700,000 units in 2010 from 554,000 in 2009. Management also expects a 2010 tax rate of approximately 37 percent and capital expenditures of approximately $190 million. Key risks for investors include the prolonged downturn in new home construction and home improvement activity, customer concentration with The Home Depot, the company's reduced borrowing capacity under its amended Five-Year Revolving Credit Agreement (cut to $1.25 billion from $2.0 billion), and pending antitrust class action litigation related to its insulation installation businesses. The company also announced in February 2010 the combination of its Builder Cabinet Group and Retail Cabinet Group into Masco Cabinetry.
Feb 16, 2010
2008
Masco Annual Report, Year Ended Dec 31, 2008
Masco Corporation manufactures, distributes and installs home improvement and building products, with about 78 percent of its 2008 sales generated by North American operations. Net sales fell 17 percent to $9.6 billion in 2008 from $11.5 billion in 2007, as new home construction declined over 30 percent and consumer spending on home improvement fell. The company reported a net loss of $391 million for 2008, driven by $467 million of pre-tax impairment charges for goodwill and other intangible assets. Operating profit dropped to $74 million from $1.05 billion, and shareholders' equity declined to $2.85 billion from $4.03 billion. Liquidity was supported by cash and cash investments of $1.03 billion at December 31, 2008, and no amounts outstanding under its $2.0 billion Five-Year Revolving Credit Agreement, which expires in February 2011. However, one rating agency lowered the company's senior debt rating to below investment grade in December 2008, which increases borrowing costs and makes refinancing more difficult. The company's total debt as a percent of total capitalization rose to 58 percent from 50 percent. Management is recommending a reduction in the quarterly dividend from $.235 to $.075 per share and expects to focus on liquidity preservation. Management's outlook is extremely challenging. The company estimates 2009 housing starts will decline about 35 percent to 550,000 to 600,000 units, and it expects consumer home improvement spending to keep declining in the near term. The Home Depot, the largest customer, accounted for approximately 21 percent of 2008 net sales, which the filing identifies as a key concentration risk.
Feb 17, 2009
2007
Masco Annual Report, Year Ended Dec 31, 2007
Masco Corporation manufactures, distributes and installs home improvement and building products, with about 80 percent of 2007 sales generated by North American operations. Net sales for 2007 were $11.77 billion, down from $12.72 billion in 2006, and operating profit fell to $959 million from $1.14 billion. Results were hurt by impairment charges for goodwill and other intangible assets of $227 million in 2007, a sharp decline in new home construction, and softer consumer spending on home improvement. Income from continuing operations was $397 million, or $1.06 per diluted share, compared with $478 million, or $1.20 per diluted share, in 2006. The company ended 2007 with cash and cash investments of $922 million, down from $1.96 billion, after repurchasing $857 million of common stock and paying $347 million in dividends. Long-term debt rose to $3.97 billion, and total debt as a percent of total capitalization decreased to 50 percent from 53 percent. Management described market conditions for the next several quarters as very challenging, expected further declines in housing starts and home improvement spending in 2008, and planned to continue share repurchases and dividend increases through 2008. The Home Depot, the largest customer, accounted for approximately 20 percent of consolidated net sales in 2007. Shareholders' equity declined to $4.03 billion from $4.47 billion, and the company announced a plan to dispose of several European business units expected to yield proceeds exceeding $140 million.
Feb 22, 2008
2006
Masco Annual Report, Year Ended Dec 31, 2006
Masco Corporation manufactures, distributes and installs home improvement and building products, organized into five segments: Cabinets and Related Products, Plumbing Products, Installation and Other Services, Decorative Architectural Products, and Other Specialty Products. Net sales for 2006 were $12.78 billion, up from $12.57 billion in 2005, but operating profit fell to $1.13 billion from $1.57 billion, driven by a $331 million non-cash goodwill impairment charge, mainly tied to its European ready-to-assemble cabinet business, Tvilum-Scanbirk. Income from continuing operations declined to $458 million (diluted EPS of $1.15) from $866 million ($2.01) in 2005. The filing attributes the weakness to an accelerating decline in new home construction in the second half of 2006 and softer consumer spending on big-ticket items such as cabinets, alongside higher commodity costs. Balance sheet and cash flow remained substantial: cash and cash investments were $1.96 billion, operating cash flow was $1.21 billion, and capital expenditures were $388 million. Total debt as a percent of total capitalization rose to 53 percent from 49 percent. In January 2007, holders of $1.8 billion principal amount at maturity of Zero Coupon Convertible Senior Notes required repurchase at a cash value of $825 million. The company repurchased $854 million of its own stock in 2006 and expects to continue repurchases in 2007, and it raised its quarterly dividend 10 percent to $.22 per share. Management expects 2007 earnings to be pressured by restructuring costs, start-up costs, higher interest expense and unrecovered commodity costs, but believes its initiatives should improve earnings in 2008 and beyond.
Feb 27, 2007
2005
Masco Annual Report, Year Ended Dec 31, 2005
Masco Corporation manufactures, sells and installs home improvement and building products, with emphasis on brand-name products holding leadership positions in their markets. For 2005, net sales were $12.64 billion, up from $11.85 billion in 2004, and income from continuing operations was $872 million ($2.03 diluted EPS), down from $949 million ($2.08) in 2004. Operating profit was $1.58 billion versus $1.59 billion in 2004. The decline reflected a $69 million non-cash goodwill impairment charge on certain European businesses, higher commodity, energy and freight costs, and a less favorable product mix. Gross profit margin fell to 28.5 percent from 30.9 percent. Net income rose to $940 million from $893 million, helped by $68 million of income from discontinued operations, which reflects the company's continued divestiture of non-core businesses. The company's largest customer, The Home Depot, accounted for $2.7 billion of 2005 sales, approximately 21 percent of the total. Cash and cash investments rose to $1.96 billion at December 31, 2005, supported by $1.37 billion of operating cash flow. Masco repurchased $986 million of common stock during 2005 and raised its quarterly dividend 11 percent to $.20 per share. Total debt as a percent of total capitalization increased to 49 percent from 44 percent, and $800 million of 6.75% notes due March 2006 were reclassified to current liabilities, which management intends to repay partly from cash. Management expects higher commodity costs from late 2005 to weigh on near-term operating performance, with selling price increases expected to largely offset those costs by the end of the first half of 2006. The company plans a plant closure in its Plumbing Products segment, with associated costs of approximately $70 million expected in 2006, and is constructing significant North American cabinet capacity expected to be completed in early 2007.
Mar 2, 2006
2004
Masco Annual Report, Year Ended Dec 31, 2004
Masco Corporation manufactures, sells and installs home improvement and building products, with emphasis on brand name products holding leadership positions in their markets. Net sales for 2004 were $12.07 billion, up from $10.57 billion in 2003, and reported operating profit was $1.57 billion versus $1.48 billion. Income from continuing operations was $930 million, or $2.04 per diluted share, compared with $790 million, or $1.61 per diluted share, in 2003. Results were reduced by a non-cash, pre-tax goodwill impairment charge of $168 million, mainly tied to European businesses, while a $30 million pre-tax Behr litigation settlement income partly offset this. Net income was $893 million. The company reported a material weakness in internal control over financial reporting as of December 31, 2004, tied to the integration of two business units. PricewaterhouseCoopers issued an adverse opinion on internal control, though it concluded the weakness did not result in a material misstatement of the 2004 financial statements. Management's disclosure controls were concluded to be not effective, and the company describes remediation steps in progress. Management also reports incremental external costs of approximately $34 million associated with Section 404 compliance. Looking ahead, management expects mid-to-high-single-digit organic growth in 2005 and record sales and earnings, while noting that rising commodity costs and a delay in price increases will weigh on first-half 2005 earnings, largely in the first quarter. The company plans at least 12 million share repurchases in 2005, and it reported cash and cash investments of $1.26 billion at year-end. Home Depot accounted for approximately 22 percent of 2004 sales.
Mar 16, 2005
2003
Masco Annual Report, Year Ended Dec 31, 2003
Masco Corporation manufactures, sells and installs home improvement and building products, with five business segments: Cabinets and Related Products ($3.06 billion net sales in 2003), Plumbing Products ($2.65 billion), Installation and Other Services ($2.41 billion), Decorative Architectural Products ($1.52 billion) and Other Specialty Products ($1.30 billion). Total 2003 net sales were $10.94 billion, up from $9.15 billion in 2002, and the filing states that acquisitions and currency translation contributed to the increase. Reported operating profit was $1.42 billion in 2003 versus $1.30 billion in 2002, after a $142 million pre-tax goodwill impairment charge (mainly European businesses) and a $72 million litigation settlement income item. Income from continuing operations was $740 million, or $1.51 per diluted share, compared with $664 million, or $1.29 per diluted share, in 2002. Net income was $806 million, or $1.64 per diluted share. The Home Depot was the largest customer, accounting for approximately 22 percent of 2003 total sales, and the filing states that losing a substantial portion of those sales would have a material adverse impact. Cash and cash investments were $795 million at year-end, and net cash from operating activities was $1.42 billion. The company repurchased $779 million of common stock during 2003 and increased its quarterly dividend 14 percent to $.16 per share. In the first quarter of 2004 management decided several European businesses with combined 2003 net sales above $350 million are not core, and began a disposition plan expected to produce net proceeds exceeding $300 million over the next twelve months, with a modest net loss expected. Management also states it believes the company will achieve record sales and earnings for full-year 2004 from continuing operations, excluding any disposition charge.
Feb 27, 2004
2002
Masco Annual Report, Year Ended Dec 31, 2002
Masco Corporation (Taylor, Michigan) manufactures, sells and installs home improvement and building products, organized into five segments: Cabinets and Related Products, Plumbing Products, Installation and Other Services, Decorative Architectural Products, and Other Specialty Products. Net sales for 2002 were $9.42 billion, up from $8.28 billion in 2001, and the company reported 2002 net income of $589.7 million, or $1.15 diluted earnings per share, compared with $198.5 million in 2001. Results were reduced by a $146.8 million pre-tax charge for the Behr Process Corporation litigation settlement (partly offset by a $19.2 million insurance recovery) and a $116.8 million pre-tax goodwill impairment recorded as a cumulative effect of an accounting change. Operating profit before general corporate expense and the litigation charge rose to $1.58 billion from $1.14 billion in 2001. Growth in 2002 came largely from acquisitions, most notably Service Partners LLC and the increase of the Hansgrohe AG stake from about 27% to 64%. Acquisitions contributed about $370 million in net sales, and the aggregate purchase price of 2002 acquisitions was about $1.2 billion. The Home Depot accounted for approximately 25 percent of 2002 sales. Cash and cash investments rose to $1.07 billion at year-end, and total debt as a percent of total capitalization decreased to 47 percent from 49 percent. Management described its outlook for 2003 as cautious, citing possible housing downturn risk, higher energy, insurance and pension costs, and a weaker first quarter. Investors should note several contingent items: the Behr settlements were estimated at $166 million to $206 million in total, with $166 million recorded as a liability, and the company holds a $448 million private equity fund portfolio and $446 million in marketable equity securities and bond funds. Zero coupon convertible notes could require a repurchase of about $800 million in April 2004. The company increased its quarterly dividend 4% to $.14 per share, marking 44 consecutive years of dividend increases.
Mar 14, 2003
2000
Masco Annual Report, Year Ended Dec 31, 2000
Masco Corporation, a manufacturer of home improvement and building products with a focus on brand-name products, reported net sales of $7.24 billion for fiscal 2000, up from $6.31 billion in 1999, and net income of $591.7 million, compared with $569.6 million in 1999. Diluted earnings per share were $1.31, versus $1.28 in 1999. The filing attributes the sales growth mainly to acquisitions, noting that excluding purchase acquisitions and divestitures, net sales rose 4 percent. Management cites a weakening in home improvement demand in North America and Europe, a stronger U.S. dollar, higher energy costs, and customer inventory reduction programs as headwinds, and states that certain of these negative trends are expected to continue in the near term. Margins were pressured in 2000. Operating profit margin before general corporate expense fell to 14.7 percent from 15.9 percent in 1999, including a $90 million non-cash pre-tax charge for the planned disposition of businesses that management considers not core to its long-term strategy. Those businesses have combined annual sales of about $600 million, and the company expects the dispositions to be substantially completed by the end of 2001. Cash from operations rose to $733.8 million, and the company funded acquisitions, capital expenditures and dividends largely with new borrowings, pushing long-term debt to $3.02 billion and total debt to 49 percent of total capitalization, up from 44 percent. In March 2001 the company issued $800 million of 6 3/4% notes due 2006 and completed the acquisition of BSI Holdings, Inc., an insulation installer. The filing also discloses a pending class action involving Behr Process Corporation's exterior wood coatings, for which the company has made no provision for potential loss and states that it is defending the suits. Shareholders received a dividend increase of eight percent during 2000 to $.13 per quarter, the 42nd consecutive annual increase. Home Depot accounted for about 26 percent of 2000 sales, and management believes losing that customer would have a material adverse impact.
Mar 29, 2001
1999-A
Masco Annual Report (Amendment), Year Ended Dec 31, 1999
Masco Corporation's Form 10-K/A (Amendment No. 1) for the fiscal year ended December 31, 1999 was filed to expand disclosure in the Segment Information note and make corresponding changes to MD&A, following SEC staff comments on a Form S-3 registration statement. The filing reports 1999 net sales of $6,307 million, up 19 percent from $5,280 million in 1998, with net income of $569.6 million and diluted earnings per share of $1.28, compared with $1.26 in 1998. Growth was supported by 1999 purchase acquisitions costing approximately $850 million and mergers with Behr Process Corporation, Mill's Pride, L.P. and a smaller company, accounted for as poolings of interests, with 1999 results affected by unusual third-quarter expense related to those poolings. Operating profit before general corporate expense was 15.9 percent of sales in 1999, down from 18.0 percent in 1998, and net income as a percentage of sales was 9.0 percent versus 10.7 percent in 1998. Insulation Installation and Other Services showed the strongest segment profit growth, with operating profit of $79 million versus $30 million, while Decorative Architectural Products fell 27 percent in operating profit. Total debt rose to 44 percent of total capitalization from approximately 41 percent, largely from acquisition borrowings; long-term debt reached $2,431.3 million at year-end 1999. Management expects increases in both sales and earnings for 2000, a 2000 effective tax rate of about 37.0 percent, and capital expenditures above $350 million excluding 2000 acquisitions.
Nov 1, 2000
1999
Masco Annual Report, Year Ended Dec 31, 1999
Masco Corporation, a Taylor, Michigan manufacturer of home improvement and building products, reported net sales of $6.307 billion for 1999, up 19 percent from $5.280 billion in 1998, with net income of $569.6 million, or $1.28 per diluted share, compared with $565.1 million in 1998. Growth was driven largely by acquisitions: the filing states that during 1999 and early 2000 the company merged with or acquired 13 businesses with aggregate annual sales of about $2 billion, including the pooling-of-interests mergers with Behr Process Corporation and Mill's Pride, L.L.P. Excluding purchase acquisitions and divestitures, net sales rose 12 percent. North America generated about 83 percent of sales, with net sales of $5.238 billion, and operating profit of $867 million. Operating profit margin before general corporate expense fell to 15.9 percent from 18.0 percent, which the company attributes to unusual expense principally related to the pooling transactions. The balance sheet expanded substantially. Total assets rose to $6.635 billion from $5.619 billion, and long-term debt increased to $2.431 billion from $1.638 billion, driven by borrowings for purchase acquisitions. Total debt as a percent of total capitalization rose to 44 percent from approximately 41 percent. The company fully utilized its $750 million bank revolving-credit facility at year-end and later amended a 364-day facility to $1 billion. Cash from operations was $490.6 million, while cash used for investing activities was $1.132 billion, including $795.0 million for 1999 purchase acquisitions. The company expects 2000 sales and earnings to increase, assuming moderate U.S. economic growth and relatively stable interest rates. The quarterly dividend was raised nine percent to $.12 per share, the 41st consecutive annual increase. Masco also holds a 17.5 percent stake in MascoTech, Inc., and a $481.3 million carrying value of Furnishings International Inc. securities.
Mar 30, 2000
1998
Masco Annual Report, Year Ended Dec 31, 1998
Masco Corporation, a manufacturer of home improvement and building products, reported net sales of $4.345 billion for 1998, up 16 percent from $3.760 billion in 1997, with net income of $476 million, or $1.39 per diluted share, compared with $382 million and $1.15 a year earlier. Net sales growth was 10 percent after adjusting for acquisitions and divestitures. Kitchen and Bath Products generated $3.294 billion of sales and $613 million of operating profit, Environmental Products and Services contributed $485 million in sales, and Builders' Hardware and Other Specialty Products contributed $566 million. The Company acquired Vasco Corporation, The Brugman Group and Heritage Bathrooms PLC during 1998, for a combined purchase price of approximately $323 million, and sold its Thermador subsidiary in July 1998. Cash from operations was $419.1 million in 1998, and capital expenditures totaled $189.0 million. Long-term debt as a percent of total capitalization improved to approximately 33 percent at year-end from approximately 36 percent, following the conversion of $178 million of convertible subordinated debentures. The Company had $750 million available under its bank revolving-credit facility at December 31, 1998, and its working capital ratio was 2.2 to 1. Management expects further increases in both sales and earnings for 1999, assuming moderate U.S. economic growth and relatively stable interest rates. The filing also includes the financial statements of MascoTech, Inc., in which Masco holds an approximately 17 percent ownership interest. MascoTech reported 1998 net sales of approximately $1.6 billion after its acquisition of TriMas Corporation in January 1998. Masco's quarterly dividend was increased to $.11 per share following the 1998 two-for-one stock split, marking the 40th consecutive year of dividend increases.
Mar 26, 1999
1997
Masco Annual Report, Year Ended Dec 31, 1997
Masco Corporation, a Delaware company headquartered in Taylor, Michigan, is engaged principally in the manufacture, sale and installation of home improvement and building products. For 1997, net sales rose to $3,760 million from $3,237 million in 1996, and operating profit from continuing operations was $587 million. Income from continuing operations was $382.4 million, or $2.30 per diluted share, compared with $295.2 million, or $1.82 per diluted share, in 1996. Kitchen and Bath Products generated $2,940 million of net sales and $539 million of operating profit, while Other Specialty Products generated $820 million of net sales and $130 million of operating profit. Acquisitions during 1997 included Texwood Industries and five other companies, with a combined purchase price of approximately $430 million. Management expects further increases in both sales and earnings for 1998, assuming moderate U.S. economic growth and stable interest rates. In early 1998, Masco completed the acquisition of the remaining 63 percent of TriMas Corporation through MascoTech, Inc. for approximately $920 million, and the company redeemed its 5.25% convertible debentures, with substantially all holders converting into common stock. Long-term debt as a percent of total capitalization improved to approximately 36 percent at December 31, 1997, from approximately 39 percent a year earlier. Cash and cash investments were $441.3 million at year-end, and the company had $750 million available under its bank revolving-credit facility. The company also holds significant equity stakes in affiliates, including approximately 17 percent of MascoTech, Inc., approximately 42 percent of Emco Limited, and a 27 percent partnership interest in Hans Grohe GmbH & Co. KG. Management reports that it had no derivative holdings at year-end 1997 and that the company's shareholder dividends have increased for 39 consecutive years, with the quarterly rate raised to $.21 per share during 1997.
Mar 27, 1998
1993
Masco Annual Report, Year Ended Dec 31, 1993
Masco Corporation's Form 10-K for the fiscal year ended December 31, 1993 reports net sales of $3.886 billion, up from $3.525 billion in 1992 and $3.141 billion in 1991, and net income of $221.1 million, or $1.45 per share, compared with $183.1 million ($1.21 per share) in 1992. The company describes itself as the largest domestic manufacturer of faucets, plumbing supplies, kitchen and bath cabinets and furniture. Its two segments are Building and Home Improvement Products, with 1993 net sales of $2.188 billion and operating profit of $412 million, and Home Furnishings Products, with net sales of $1.698 billion and operating profit of $69 million. Management attributed the higher 1993 margins to improved market shares and a modest economic recovery, plus income from its equity investments in MascoTech, Inc. Balance sheet and cash flow data show total assets of $4.02 billion, long-term debt of $1.418 billion and shareholders' equity of $1.998 billion at year-end 1993. Operating cash flow was $261 million, capital expenditures were $167 million, and cash dividends paid were $99 million. The company issued $400 million of fixed-rate notes in 1993 to repay floating-rate bank borrowings. Masco owned approximately 42 percent of MascoTech, Inc., and in 1993 it converted debentures to raise that stake, and it held roughly 5 percent of TriMas Corporation. The filing also includes MascoTech's separate audited statements, which show net sales of $1.583 billion and a shareholder base that includes a large Masco stake. The filing states that the company's dividend rate was increased 7 percent to $.17 per quarter in 1993, the 35th consecutive year of increases. Litigation disclosed in the filing, including plastic plumbing fitting claims and California lead-leaching faucet suits, is described by management as not expected to have a material adverse effect on financial position.
Mar 25, 1994