Masco Corporation (NYSE:MAS) Q4 2017 Earnings Conference Call Transcript

Feb 08, 2018 • 08:00 am ET


Masco Corporation (NYSE:MAS) Q4 2017 Earnings Conference Call Transcript


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Good morning, ladies and gentlemen. Welcome to Masco Corporation's 2017 Fourth Quarter and Full Year Conference Call. My name is Lisa and I will be your conference operator for today's call. As a reminder, today's conference call is being recorded for replay purposes. (Operator Instructions)

I will now turn the call over to David Chaika, Vice President, Treasurer and Investor Relations. You may begin.

David Chaika

Thank you, Lisa, and good morning. Welcome to Masco Corporation's 2017 fourth quarter and full year conference call. With me today are Keith Allman, President and CEO of Masco; and John Sznewajs, Masco's Vice President and Chief Financial Officer.

Our fourth quarter earnings release and the presentation slides we will refer to today are available on our website under Investor Relations. Following our remarks, we will open the call for analysts' questions. Please limit yourself to one question with one follow-up. If we can't take your question now, please call me directly at 313-792-5500.

Our statements today will include our views about our future performance, which constitute forward-looking statements. These statements are subject to risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements. We've described these risks and uncertainties in our Risk Factors and Other Disclosures in our Form 10-K and our Form 10-Q that we filed with the Securities and Exchange Commission. Our statements will also include non-GAAP financial measures. Our references to operating profit and earnings per share will be as adjusted, unless otherwise noted. We reconciled these adjusted measurements to GAAP in our earnings release and presentation slides, which are available on our website under Investor Relations.

With that, I'll now turn the call over to our President and Chief Executive Officer, Keith Allman.

Keith Allman

Thank you, Dave. Good morning, everyone, and thank you for joining us today. Please turn to Slide 4.

In May of 2015, the new leadership team at Masco held our first Investor Day in over seven years. We introduced the new team, outlined our strategies in detail and committed to more than doubling our earnings per share from $0.88 in 2014 to $1.80 in 2017. I'm very proud to say that the Masco team exceeded that $1.80 target by earning $1.94 per share, a three-year compounded growth rate of over 30%. I would like to thank our more than 26,000 employees worldwide for their hard work and dedication and for doing their part to help us accomplish this lofty goal.

Let's discuss some of our key accomplishments in 2017 that contributed to the achievement of this goal. Our revenues for the year grew 4%, excluding the impact of currency, and our operating profit increased 9% or $98 million as margins expanded 70 basis points to 15.3%, our highest margin in 15 years. This operating profit growth demonstrates our strong operating leverage, continued improvements in cost productivity and our ability to successfully implement price across segments to offset raw material and other inflation, demonstrating the strength of our brands, innovation and the value that