Masco Corp (NYSE:MAS) Q3 2019 Earnings Conference Call - Final Transcript

Oct 30, 2019 • 08:00 am ET

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Masco Corp (NYSE:MAS) Q3 2019 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good morning, ladies and gentlemen, and welcome to Masco Corporation's 2019 Third Quarter Conference Call. My name is Tawanda and I will be your operator for today's call. [Operator Instructions] I will now turn the call over to, David Chaika, Vice President, Treasurer and Investor Relations. You may begin.

Executive
David Chaika

Thank you, Tawanda, and good morning. Welcome to Masco Corporation's 2019 third 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 third 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 question now, please call me directly at 313-792-5500.

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 metrics. Our references to operating profit and earnings per share will be as adjusted, unless otherwise noted. We reconcile these adjusted metrics to GAAP in our earnings release and presentation slides which are available on our website under Investor Relations. Finally, please note that we have accounted for our Windows businesses as discontinued operations for all periods presented.

With that, I'll now turn the call over to Keith.

Executive
Keith Allman

Thank you, Dave. Good morning everyone and thank you for joining us today. In the third quarter, our top line increased 3% excluding the impact of currency, driven by growth in Plumbing and strong performance in our paint business. Operating profit grew 8% and operating margins expanded 80 basis points to 16.7% in the quarter due to higher volume, pricing actions and disciplined cost control. Our EPS grew 11% to $0.68 per share.

Turning to our segment performance. Our Plumbing segment grew 1% or 3% in local currency. Delta had a record sales quarter, led by growth in bathing and sanitary ware products, Brizo, our showroom brand, and pricing actions. Additionally, I'm proud that for the fifth time Delta faucet company achieved the WaterSense Sustained Excellence Award. This is the highest partner recognition from the US EPA, awarded for Delta's continued outstanding efforts to advance the WaterSense program and promote water efficiency.

Watkins also had another record sales quarter, as it continue to gain share in the spa market with its broad assortment of price points, programs and innovative products. International Plumbing grew 5% in local currency, due to strong growth in Germany, China and France, as Hansgrohe launched new products into the market as we discussed last quarter.

In our Decorative Architectural segment, sales grew 5%. This growth was