01—Abstract
Summary
Summary of the 10-Q filed July 25, 2024. Cited figures are marked; the original filing is the authoritative source.
Masco Corporation's Form 10-Q for the quarter ended June 30, 2024 reports second-quarter net sales of $2,091 milliona, down from $2,127 million in the prior-year quarter, while net income attributable to Masco Corporation was $258 million versus $263 million.
For the first six months, net sales were $4,017 millionb versus $4,106 million, and net income attributable to Masco Corporation rose to $473 million from $468 million. Diluted income per common share was $1.17 for the quarter (versus $1.16) and $2.14 for the six months (versus $2.07). Management attributes the sales decline mainly to lower sales volume in paints and other coating products and unfavorable sales mix in plumbing products, partly offset by higher net selling prices.
Gross profit grew to $785 millionc for the quarter, supported by cost savings initiatives and lower commodity costs, while SG&A expenses rose to $388 million on higher employee-related costs. Cash and cash investments declined to $398 million at June 30, 2024 from $634 million at December 31, 2023. Net cash from operating activities was $252 million for the six months, down from $448 million a year earlier, reflecting working capital changes.
Shareholder returns remained significant: the company repurchased approximately $290 milliond of common stock in the first half of 2024 and paid $128 million in cash dividends, leaving about $1.4 billion remaining under its 2022 repurchase authorization. Long-term debt was unchanged at $2,945 million, and the company stated it was in compliance with all covenants under its $1.0 billion revolving credit agreement, with no borrowings outstanding.
Management stated that it is experiencing, and may continue to experience, lower market demand and elevated commodity and other input costs, and that it aims to offset these pressures through productivity improvements, pricing, and other initiatives. The filing reports no material changes to risk factors from the 2023 Form 10-K.
02—Key points
Key Highlights
- Net sales for Q2 2024 were $2,091 million, down from $2,127 million; six-month net sales were $4,017 million versus $4,106 million.
- Net income attributable to Masco Corporation was $258 million for Q2 2024 (vs. $263 million) and $473 million for the six months (vs. $468 million).
- Diluted income per common share was $1.17 for Q2 2024 and $2.14 for the six months, compared with $1.16 and $2.07 a year earlier.
- Gross profit rose to $785 million in Q2 2024, with gross margin of 37.5% versus 36.2%, driven by cost savings and lower commodity costs.
- Operating cash flow fell to $252 million for the six months from $448 million, and cash and cash investments declined to $398 million from $634 million at year-end 2023.
- Masco repurchased about $290 million of common stock in the first half of 2024 and had approximately $1.4 billion remaining under its 2022 authorization.
- No borrowings were outstanding under the $1.0 billion revolving credit agreement at June 30, 2024, and the company reported compliance with all covenants.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2024, Masco kept $0.12.
- Revenue$2.09B100.0%
- Cost of revenue−$1.31B62.5%
- Gross profit$785.0M37.5%
- Operating costs−$388.0M18.6%
- Operating income$397.0M19.0%
- Interest, other & tax−$139.0M6.6%
- Net income$258.0M12.3%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2024filed July 25, 2024Financial Statements
Q2 FY2024 against Q2 FY2023
| Line item | Q2 FY2024Q2 FY2023 | Change |
|---|---|---|
| Revenue | $2.09B$2.13B | −1.7% |
| Cost of Revenue | $1.31B$1.36B | −3.8% |
| Gross Profit | $785.00M$769.00M | +2.1% |
| SG&A Expenses | $388.00M$366.00M | +6.0% |
| Operating Income | $397.00M$403.00M | −1.5% |
| Net Income | $258.00M$263.00M | −1.9% |
| EPS (Basic) | $1.18$1.17 | +0.9% |
| EPS (Diluted) | $1.17$1.16 | +0.9% |
| Shares Outstanding (Basic) | 219.00M225.00M | −2.7% |
| Shares Outstanding (Diluted) | 220.00M226.00M | −2.7% |
05—Questions
Frequently Asked Questions
How did Masco's sales and profitability perform in the second quarter of 2024?
Net sales were $2,091 million, down from $2,127 million, mainly due to lower sales volume in paints and other coating products and unfavorable plumbing sales mix. Despite lower sales, gross profit increased to $785 million, and net income attributable to Masco Corporation was $258 million, compared with $263 million in the prior-year quarter.
Why did operating cash flow decline in the first half of 2024?
Net cash from operating activities was $252 million versus $448 million a year earlier. The filing shows increases in receivables of $265 million and a $87 million decrease in accounts payable and accrued liabilities, partly offset by cash provided by operations of $648 million.
How is Masco returning capital to shareholders?
In the first six months of 2024, Masco paid $128 million in cash dividends and repurchased and retired approximately 4.1 million shares for about $292 million including excise tax. Dividends declared were $0.290 per share for the second quarter, and about $1.4 billion remained under the 2022 repurchase authorization at June 30, 2024.
What is Masco's debt and liquidity position?
Long-term debt was $2,945 million at both June 30, 2024 and December 31, 2023. Cash and cash investments were $398 million, and the current ratio was 1.8 to 1. The $1.0 billion 2022 Credit Agreement had no borrowings outstanding, and the company was in compliance with its covenants.
What risks does management highlight for the business?
Management cited lower market demand and elevated commodity and other input costs, as well as employee-related cost inflation. It said it aims to offset these pressures through productivity improvements, pricing, and other initiatives, and the filing states there were no material changes to the risk factors in the 2023 Form 10-K.
06—Continue