Masco Corporation (NYSE:MAS) Q1 2019 Earnings Conference Call Transcript

Apr 25, 2019 • 08:00 am ET


Masco Corporation (NYSE:MAS) Q1 2019 Earnings Conference Call Transcript


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Good morning. My name is Amy, and I will be your conference operator today. At this time, I would like to welcome everyone to the Masco's First Quarter 2019 Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions) As a reminder, this call will be recorded today, Thursday, April 25th, 2019. Thank you.

David Chaika, Vice President, Treasurer and Investor Relations, you may begin your conference.

David Chaika

Thank you, Amy, and good morning. Welcome to Masco Corporation's 2019 first quarter 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 first quarter earnings release and the presentation slides that we will refer to today are available on our website under Investor Relations. Following our remarks, we will open the call for analyst questions. Please limit yourself to one question with one follow-up. If we can't take your questions 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 describe 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 reconcile 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 Keith.

Keith Allman

Thank you, Dave, and good morning, everyone. Thank you for joining us today. Please turn to Slide 4. We experienced a slow start in 2019 as a combination of factors impacted our results. Some of these factors were anticipated such as sales pull forward into the fourth quarter of 2018 and a large ERP implementation in our windows business. However, other factors were external and not anticipated such as inventory re-balancing in certain plumbing and decorative channels, and softer end market demand early in the quarter.

Despite our slow start to the year, we saw sales trends improve in March and believe that markets are now performing as we expected. For the quarter, excluding the impact of currency and acquisitions, sales decreased 2%. Operating profit decreased $20 million principally due to lower volumes in our plumbing, decorative and windows segments. These were partially offset by pricing actions we took across all segments. Our earnings per share decreased 2% due to the lower operating profit.

Turning to our segments. Excluding currency, Plumbing sales were flat. Volume decline in North America was the biggest contributor to flat sales as volume was affected by the sales pull forward into Q4 of 2018 that we discussed last