Masco Corporation Reports Fourth Quarter and 2022 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 2022.

Highlights

• Sales for the fourth quarter decreased 5 percent to $1,923 million
• Operating profit for the quarter was $185 million; adjusted operating profit was $234 million
• Earnings per share from continuing operations for the quarter was $0.51 per share; adjusted earnings per share from continuing operations was $0.65 per share
• 2023 earnings per share expected to be in the range of $3.06 – $3.36 per share, and on an adjusted basis, to be in the range of $3.10 – $3.40 per share
• Board declares a quarterly dividend of $0.285 per share, a 2 percent increase, payable on March 13, 2023 to shareholders of record on February 23, 2023

2022 Fourth Quarter Results

• On a reported basis, compared to fourth quarter 2021:
  • Net sales decreased 5 percent to $1,923 million; in local currency, net sales decreased 2 percent
  • In local currency, North American sales decreased 5 percent and international sales increased 7 percent
  • Gross margin decreased 230 basis points to 28.3 percent from 30.6 percent
  • Operating margin decreased 120 basis points to 9.6 percent from 10.8 percent
  • Net income decreased to $0.51 per share, compared to $0.55 per share
• Compared to fourth quarter 2021, results for key financial measures, as adjusted for certain items (see Exhibit A) and with a normalized tax rate of 24 percent (25 percent for 2021), were as follows:
  • Gross margin decreased 120 basis points to 29.5 percent from 30.7 percent
  • Operating margin decreased 90 basis points to 12.2 percent from 13.1 percent
  • Net income decreased to $0.65 per share, compared to $0.67 per share
• Liquidity at the end of the fourth quarter was $1,452 million (including availability under revolving credit facility)
• Plumbing Products’ net sales decreased 3 percent; in local currency, sales increased 2 percent
• Decorative Architectural Products’ net sales decreased 8 percent

2022 Full Year Highlights

• Sales for the year increased 4 percent to $8,680 million; in local currency, sales increased 6 percent
• Operating profit declined 8 percent to $1,297 million; adjusted operating profit declined 7 percent to $1,355 million
• Returned $1,172 million to shareholders through share repurchases and dividends
• Earnings per share from continuing operations for the year grew 124 percent to $3.63 per share; adjusted earnings per share increased 2 percent to $3.77 per share from $3.70 per share

2022 Full Year Results

• On a reported basis, compared to full year 2021:
  • Net sales increased 4 percent to $8,680 million; in local currency and excluding acquisitions and divestitures, net sales increased 6 percent
  • In local currency, North American sales increased 6 percent and international sales increased 8 percent
  • Gross margin decreased 290 basis points to 31.3 percent from 34.2 percent
  • Operating profit decreased 8 percent to $1,297 million from $1,405 million
  • Operating margin decreased 190 basis points to 14.9 percent from 16.8 percent
  • Net income increased to $3.63 per share, compared to $1.62 per share
• Compared to full year 2021, results for key financial measures, as adjusted for certain items (see Exhibit A) and with a normalized tax rate of 24 percent (25 percent for 2021), were as follows:
  • Gross margin decreased 260 basis points to 31.6 percent from 34.2 percent
  • Operating profit decreased 7 percent to $1,355 million from $1,454 million
  • Operating margin decreased 180 basis points to 15.6 percent from 17.4 percent
  • Net income increased to $3.77 per share, compared to $3.70 per share

“In the fourth quarter, demand softened across product categories in North America, partially offset by selling price increases,” said Keith Allman, Masco’s President and Chief Executive Officer. “International markets remained strong with sales growth of 7 percent in local currency. Lower volumes, foreign currency and higher operational costs pressured operating margins in the quarter.”

“For the full year 2022, we delivered 4 percent sales growth against a 17 percent comp in 2021, and 2 percent adjusted earnings per share growth,” continued Allman. “In 2022, despite higher operational costs and softening demand, we delivered earnings growth for our shareholders and executed our capital deployment strategy by returning approximately $1.2 billion to shareholders in the form of share repurchases and dividends.”

“In 2023, we believe the near-term demand environment will remain challenging,” said Allman. “We are preparing for volumes overall to be down in the low double-digit range and anticipate adjusted earnings per share to be in the range of $3.10 to $3.40 per share. Despite the expected near-term market softness, we believe the long-term fundamentals of our repair and remodel markets remain strong. We are focused on capitalizing on these positive long-term demand trends by improving our margins and continuing to invest in growth opportunities. With our industry leading repair and remodel-oriented products in diverse channels, strong balance sheet, and disciplined capital allocation, we believe Masco is well positioned to deliver long-term shareholder value creation.”

Dividend Declaration

Masco’s Board of Directors declared a quarterly dividend of $0.285 per share, a 2 percent increase, payable on March 13, 2023 to shareholders of record on February 23, 2023.

“The Board’s decision to once again increase Masco’s quarterly cash dividend is consistent with our capital allocation strategy of targeting a dividend payout ratio of approximately 30 percent with annual increases through a cycle,” said Allman. “This increase underscores the strength of our company’s financial position, our ability to generate consistent, strong free cash flow, and the Board’s confidence in Masco’s future.”

For the complete press release, click here.

About Masco

Headquartered in Livonia, Michigan, Masco Corporation (NYSE: MAS) 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