-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, JXAOnuN+3xfMhOnvK5WLhPekUnX4qTIkLcyHRztyyRSTF//4hAoVaT9ar8A7Kcn8 oqitt+uzR01SZKPektj6PQ== 0000062996-95-000010.txt : 19950516 0000062996-95-000010.hdr.sgml : 19950516 ACCESSION NUMBER: 0000062996-95-000010 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950515 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MASCO CORP /DE/ CENTRAL INDEX KEY: 0000062996 STANDARD INDUSTRIAL CLASSIFICATION: WOOD HOUSEHOLD FURNITURE, (NO UPHOLSTERED) [2511] IRS NUMBER: 381794485 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-05794 FILM NUMBER: 95539648 BUSINESS ADDRESS: STREET 1: 21001 VAN BORN RD CITY: TAYLOR STATE: MI ZIP: 48180 BUSINESS PHONE: 3132747400 MAIL ADDRESS: STREET 1: 21001 VAN BORN ROAD CITY: TAYLOR STATE: MI ZIP: 48180 FORMER COMPANY: FORMER CONFORMED NAME: MASCO SCREW PRODUCTS CO DATE OF NAME CHANGE: 19731025 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Quarterly Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934 For Quarter Ended March 31, 1995. Commission File Number 1-5794 MASCO CORPORATION (Exact name of Registrant as specified in its Charter) Delaware 38-1794485 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 21001 Van Born Road, Taylor, Michigan 48180 (Address of principal executive offices) (Zip Code) (313) 274-7400 (Telephone Number) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practical date. Shares Outstanding at Class May 1, 1995 Common stock, par value $1 per share 158,461,000 MASCO CORPORATION INDEX Page No. Part I. Financial Information Item 1. Financial Statements Condensed Consolidated Balance Sheet - March 31, 1995 and December 31, 1994 1 Condensed Consolidated Statement of Income for the Three Months Ended March 31, 1995 and 1994 2 Condensed Consolidated Statement of Cash Flows for the Three Months Ended March 31, 1995 and 1994 3 Notes to Condensed Consolidated Financial Statements 4-7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8 Unaudited Information Regarding Equity Affiliates for the Three Months Ended March 31, 1995 and 1994 9 Part II. Other Information and Signature 10 MASCO CORPORATION CONDENSED CONSOLIDATED BALANCE SHEET March 31, 1995 and December 31, 1994 (Dollars in thousands) March 31, December 31, ASSETS 1995 1994 Current assets: Cash and cash investments $ 55,210 $ 61,160 Marketable securities 11,520 9,910 Accounts and notes receivable, net 798,030 745,170 Prepaid expenses and other 121,030 126,370 Inventories: Finished goods 422,730 388,440 Raw material 398,610 333,280 Work in process 186,080 227,110 1,007,420 948,830 Total current assets 1,993,210 1,891,440 Equity investments in MascoTech, Inc. 191,740 184,960 Equity investments in other affiliates 60,690 57,790 Property and equipment, net 1,268,850 1,231,810 Excess of cost over acquired net assets 708,210 706,160 Other noncurrent assets 320,020 317,880 Total assets $4,542,720 $4,390,040 LIABILITIES Current liabilities: Notes payable $ 92,970 $ 48,380 Accounts payable 189,940 201,320 Accrued liabilities 384,800 351,590 Total current liabilities 667,710 601,290 Long-term debt 1,571,980 1,592,610 Deferred income taxes and other 85,930 83,460 Total liabilities 2,325,620 2,277,360 SHAREHOLDERS' EQUITY Common stock, par value $1 per share Authorized shares: 400,000,000 158,750 156,990 Preferred stock, par value $1 per share Authorized shares: 1,000,000 --- --- Paid-in capital 84,510 44,840 Retained earnings 1,971,590 1,924,740 Cumulative translation adjustments 2,250 (13,890) Total shareholders' equity 2,217,100 2,112,680 Total liabilities and shareholders' equity $4,542,720 $4,390,040 See notes to condensed consolidated financial statements. 1 MASCO CORPORATION CONDENSED CONSOLIDATED STATEMENT OF INCOME For the Three Months Ended March 31, 1995 and 1994 (Amounts in thousands except per share data) Three Months Ended March 31 1995 1994 Net sales $1,226,000 $1,050,000 Costs and expenses, net: Cost of sales 815,400 698,000 Selling, general and administrative expenses 261,000 230,100 Other (income) expense, net: Interest expense 28,500 26,500 Re: MascoTech, Inc.: Equity earnings (3,800) (7,400) Gain from stock sale --- (4,400) Other, net 800 (2,200) 25,500 12,500 1,101,900 940,600 Income before income taxes 124,100 109,400 Income taxes 49,700 44,100 Net income $ 74,400 $ 65,300 Per share data: Net income $.47 $.42 Cash dividends declared and paid $.18 $.17 Average shares outstanding 158,400 156,500 See notes to condensed consolidated financial statements. 2 MASCO CORPORATION CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS For the Three Months Ended March 31, 1995 and 1994 (Dollars in thousands) Three Months Ended March 31 1995 1994 CASH FLOWS FROM (FOR) OPERATING ACTIVITIES: Cash provided by operations $ 91,090 $ 85,880 (Increase) in receivables (95,230) (68,380) (Increase) in inventories (58,590) (17,680) Decrease in prepaid expenses 5,340 8,960 Increase (decrease) in current liabilities 20,550 (3,630) Total cash from (for) operating activities (36,840) 5,150 CASH FLOWS FROM (FOR) INVESTING ACTIVITIES: Proceeds from sale of Formica Investment 73,770 --- Capital expenditures (59,620) (47,680) Other, net 21,060 (1,740) Total cash from (for) investing activities 35,210 (49,420) CASH FLOWS FROM (FOR) FINANCING ACTIVITIES: Increase in debt 97,030 27,020 Payment of debt (73,070) (30,530) Cash dividends paid (28,280) (26,280) Total cash (for) financing activities (4,320) (29,790) CASH AND CASH INVESTMENTS: (Decrease) for the quarter (5,950) (74,060) At January 1 61,160 119,980 At March 31 $ 55,210 $ 45,920 Supplemental Cash Flow Information: Net cash paid during the period for: Interest $ 26,380 $ 25,770 Income taxes $ 24,010 $ 22,010 See notes to condensed consolidated financial statements. 3 MASCO CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS A. In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements contain all adjustments, of a normal recurring nature, necessary to present fairly its financial position as at March 31, 1995 and the results of operations and changes in cash flows for the three months ended March 31, 1995 and 1994. The condensed consolidated balance sheet at December 31, 1994 was derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles. Earnings per share are calculated based on the weighted average common shares outstanding. B. Other (income) expense, net consists of the following, in thousands: Three Months Ended March 31 1995 1994 Interest expense $28,500 $26,500 Re: MascoTech, Inc. Equity earnings (3,800) (7,400) Gain from stock sale --- (4,400) Equity earnings, other (2,100) (1,200) Interest income and gains from marketable securities and cash investments (3,000) (3,600) Other, net 5,900 2,600 $25,500 $12,500 Included in other, net for the three months ended March 31, 1995, was a $15.9 million gain from the sale of the Company's investment in Formica Corporation; this gain was offset by charges and reserves for profit improvement programs and asset disposals that should enhance the Company's future performance. 4 MASCO CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) C. The following presents the combined unaudited financial statements of the Company, MascoTech, Inc. and TriMas Corporation as one entity, with Masco Corporation as the parent company. Intercompany transactions have been eliminated. Amounts, except per share data, are in thousands. Combined Balance Sheet March 31, December 31, Assets 1995 1994 Current assets: Cash and cash investments $ 183,060 $ 230,780 Marketable securities 42,790 72,020 Accounts and notes receivable, net 1,080,550 980,940 Prepaid expenses 124,890 133,490 Deferred income taxes 67,810 68,270 Net current assets of businesses held for disposition 121,470 146,690 Inventories: Finished goods 491,400 449,290 Raw material 454,370 404,240 Work in process 235,670 266,810 1,181,440 1,120,340 Total current assets 2,802,010 2,752,530 Equity investments in affiliates 182,090 150,310 Property and equipment, net 1,837,990 1,779,520 Excess of cost over acquired net assets 968,430 964,000 Net assets of discontinued operations 189,720 232,370 Other assets 425,740 405,220 Total assets $6,405,980 $6,283,950 Liabilities and Shareholders' Equity Current liabilities: Notes payable $ 99,070 $ 52,330 Accounts payable 316,630 334,770 Accrued liabilities 511,980 457,160 Total current liabilities 927,680 844,260 Long-term debt 2,612,410 2,699,450 Deferred income taxes and other 214,930 206,630 Other interests in combined affiliates 433,860 420,930 Equity of shareholders of Masco Corporation 2,217,100 2,112,680 Total liabilities and shareholders' equity $6,405,980 $6,283,950 5 MASCO CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) Note C - Continued: Three Months Ended March 31 Combined Statement of Income 1995 1994 Net sales $1,810,760 $1,592,860 Costs and expenses, net: Cost of sales 1,277,100 1,119,310 Selling, general and administrative expenses 331,020 295,620 Other (income) expense, net: Interest expense 46,930 40,420 Other income, net (4,000) (20,910) 42,930 19,510 1,651,050 1,434,440 Income before income taxes and other interests 159,710 158,420 Income taxes 69,140 70,800 Income before other interests 90,570 87,620 Other interests in combined affiliates 16,170 22,320 Net income $ 74,400 $ 65,300 Per share data: Net income $.47 $.42 Cash dividends declared and paid $.18 $.17 Average shares outstanding 158,400 156,500 6 MASCO CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (concluded) Note C - Concluded: Three Months Ended March 31 Combined Statement of Cash Flows 1995 1994 Cash Flows From (For) Operating Activities: Cash provided by operations $ 119,190 $ 107,330 (Increase) in receivables (127,610) (114,370) (Increase) in inventories (56,860) (27,930) (Increase) decrease in marketable securities, net 30,840 (30,010) Decrease in prepaid expenses 2,200 1,930 Increase in current liabilities 19,400 1,580 Total cash (for) operating activities (12,840) (61,470) Cash Flows From (For) Investing Activities: Capital expenditures (87,980) (78,940) Proceeds from sale of Formica Investment 73,770 --- Proceeds from sale of subsidiaries 28,880 --- Acquisitions, net of cash acquired (21,190) --- Other, net 48,900 39,390 Total cash from (for) investing activities 42,380 (39,550) Cash Flows From (For) Financing Activities: Increase in debt 270,780 364,260 Payment of debt (314,580) (353,450) Cash dividends paid (33,460) (30,890) Total cash from (for) financing activities (77,260) (20,080) Cash and Cash Investments: (Decrease) for the period (47,720) (121,100) At January 1 230,780 272,950 At March 31 $ 183,060 $ 151,850 7 MASCO CORPORATION Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FIRST QUARTER 1995 VERSUS FIRST QUARTER 1994 Net sales for the three months ended March 31, 1995 increased 17 percent to $1,226 million from $1,050 million in the comparable period in 1994. Home Improvement and Building Products sales increased 16 percent for the three months ended March 31, 1995 from the comparable period in 1994. Home Furnishings Products sales for the three months ended March 31, 1995 increased 17 percent from the comparable period in 1994. After adjusting for recent acquisitions, net sales of Home Improvement and Building Products increased 13 percent and net sales of Home Furnishings Products increased five percent. Cost of sales as a percentage of sales was 66.5 percent for both of the 1995 and 1994 first quarters. Selling, general and administrative expenses as a percentage of sales for the three months ended March 31, 1995 decreased to 21.3 percent from 21.9 percent in the comparable period in 1994. The Company's operating profit margins continued to improve in the 1995 first quarter, with major product lines benefitting primarily from increased sales and profit improvement programs. Included in other (income) expense, net for the three months ended March 31, 1995 are equity earnings from MascoTech, Inc. of $3.8 million as compared with equity earnings of $7.4 million in the comparable period in 1994. Also included in other (income) expense for the three months ended March 31, 1995, was a $15.9 million gain from the sale of the Company's investment in Formica Corporation; this gain was offset by charges and reserves for profit improvement programs and asset disposals that should enhance the Company's future performance. Also included in other (income) expense for the three months ended March 31, 1994 was a $4.4 million gain from the sale of MascoTech stock. Net income for the first quarter of 1995 increased 14 percent to $74.4 million from $65.3 million in the comparable period in 1994, and earnings per share increased 12 percent to $.47 from $.42. Excluding the 1994 MascoTech stock gain and equity earnings from affiliates in both first quarters, net income would have increased 23 percent. While higher interest rates have resulted in lower residential construction activity and a moderation in consumer spending resulting in lower demand for some of our products, the Company continues to anticipate improved sales and operating profit for 1995. At March 31, 1995 current assets were three times current liabilities. First quarter 1995 cash from operations was affected by an expected and recurring first quarter increase in accounts receivable. As the annual increase in accounts receivable is historically experienced in the first quarter, cash from operations in the remaining three quarters of 1995 should not be affected by significant increases in accounts receivable. The Company believes that its cash from operations and, to the extent necessary, future financial market activities and bank borrowings, are sufficient to fund its working capital and other investment needs. The Company has on file with the Securities and Exchange Commission, an unallocated shelf registration pursuant to which the Company is able to issue up to a combined $759.4 million of debt and equity securities. 8 UNAUDITED INFORMATION REGARDING EQUITY AFFILIATES FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1994 Equity investments in affiliates consist primarily of the following approximate common stock and partnership interests at March 31: 1995 1994 MascoTech, Inc. 44% 41% Hans Grohe, a German partnership 27% 27% TriMas Corporation 5% 5% The following presents the condensed financial data of MascoTech, Inc. Amounts are in thousands. Three Months Ended March 31 1995 1994 Sales - Net $445,010 $412,410 Gross Profit $ 75,460 $ 80,290 Net Income (Before Preferred Stock Dividends) $ 13,460 $ 26,300 9 PART II. OTHER INFORMATION MASCO CORPORATION Items 1 through 5 are not applicable. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits: 11 - Computation of Earnings Per Share 12 - Computation of Ratio of Earnings to Fixed Charges 27 - Financial Data Schedule (b) Reports on Form 8-K: None. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. MASCO CORPORATION (Registrant) Date: May 15, 1995 By: Richard G. Mosteller Senior Vice-President - Finance (Chief Financial officer and authorized signatory) 10 MASCO CORPORATION EXHIBIT INDEX Exhibit Exhibit 11 Computation of Earnings Per Share Exhibit 12 Computation of Ratio of Earnings to Fixed Charges Exhibit 27 Financial Data Schedule EX-11 2 Exhibit 11 MASCO CORPORATION AND CONSOLIDATED SUBSIDIARIES COMPUTATION OF EARNINGS PER SHARE Primary and Fully Diluted Earnings Per Share For the Three Months Ended March 31, 1995 and 1994 (Amounts in thousands except per share amounts) Three Months Ended March 31 1995 1994 Shares for computation of primary and fully diluted earnings per share: Average number of shares outstanding 158,400 156,500 Common stock equivalents: Shares issuable assuming conversion of debentures 4,200 4,200 Stock options 700 1,400 163,300 162,100 Net income, adjusted to basis of earnings per share: Net income $74,400 $65,300 Add interest on convertible debentures, net of tax 1,500 1,500 $75,900 $66,800 Primary and fully diluted earnings per share $.47 $.42 Earnings per share as reported $.47 $.42 This calculation is submitted in accordance with Regulation S-K Item 601(b)(11), although not required by APB Opinion No. 15, inasmuch as dilution for either period was less than 3 percent. EX-12 3 Exhibit 12 MASCO CORPORATION AND CONSOLIDATED SUBSIDIARIES Computation of Ratio of Earnings to Fixed Charges (Thousands of Dollars) Three Months Ended March 31, Year Ended December 31, 1995 1994 1993 1992 1991 1990 Earnings Before Income Taxes And Fixed Charges: Income before income taxes $124,100 $322,600 $362,600 $304,800 $ 97,600 $235,900 Deduct/add equity in undistributed (earnings) losses of fifty-percent- or-less-owned companies (3,800) 108,030 (13,800) (13,190) 38,090 10,540 Add interest on indebtedness, net 28,440 103,800 104,080 100,490 124,950 125,770 Add amortization of debt expense 550 2,220 2,650 2,710 1,630 1,420 Add one-third of rentals 3,200 11,180 10,970 10,800 12,530 9,610 Earnings before income taxes and fixed charges $152,490 $547,830 $466,500 $405,610 $274,800 $383,240 Fixed charges: Interest on indebtedness $ 29,400 $107,510 $105,420 $113,670 $128,450 $125,770 Amortization of debt expense 550 2,220 2,650 2,710 1,630 1,420 One-third of rentals 3,200 11,180 10,970 10,800 12,530 9,610 $ 33,150 $120,910 $119,040 $127,180 $142,610 $136,800 Ratio of earnings to fixed charges 4.6 4.5 3.9 3.2 1.9 2.8
EX-27 4
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM MASCO CORPORATION'S MARCH 31, 1995 FORM 10-K AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS DEC-31-1995 MAR-31-1995 55,210 11,520 798,030 0 1,007,420 1,993,210 1,268,850 0 4,542,720 667,710 1,571,980 158,750 0 0 2,058,350 2,217,100 1,226,000 1,226,000 815,400 815,400 0 0 28,500 124,100 49,700 124,100 0 0 0 74,400 .47 .47 Receivables and property and equipment are presented net of allowances for doubtful accounts and accumulated depreciation and amortization, respectively.
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