Goal: Understanding home improvement
The Home Improvement Research Institute (HIRI) will enter its comfort zone April 13. That’s when the non-profit research organization hosts its 2011 HIRI Spring Conference at the Doubletree Hotel Crystal City in Arlington, Va.
The one-day event runs from 8:30 a.m. to 3:30 p.m. and will feature seven presentations connected to the theme of “Understanding Today’s Home Improvement Industry.”
Presenters include the Mortgage Bankers Association, IHS Global Insight, The NPD Group, Synovate, TNS and Itracks.
Early registration discounts are available to those who register by March 11. Visit the HIRI website at HIRI.org for more information.
In brief: Masco’s tough Q4
Masco CEO Timothy Wadhams had his work cut out for him on Feb. 15. That’s when he had to lead the discussion of his company’s fourth-quarter and full-year earnings results — including a fourth-quarter net loss attributable to Masco Corp. of $1.034 billion.
That massive figure, one of the biggest to appear in the home channel, included good will and other intangible impairment of $721 million. But still.
Wadhams didn’t sugar coat the news. Out of the box he dove into sales, down 9.0% in the fourth quarter. He volunteered — even before the Q&A — the fact that sales to key retailers were off in the mid-teen percentage range. Masco’s particularly hard-hit cabinet business was down 29% in the fourth quarter.
But there were some positives — including $500 million in fixed-cost reductions realized at the end of 2010. Bright innovations include Arrow’s R.E.D. line, the Watkins Ace Sanitizer and the ProCision countertop solution.
“We continue to be very optimistic about the longer term,” he said. “Household formations, population growth, the age of the housing stock — all of those are positives, we think, for our business.”
Optimism from the Oracle of Omaha
A housing recovery will probably begin within a year. So says Warren Buffett, investment icon and CEO of Berkshire Hathaway.
Still, the Omaha, Neb.-based company’s home-construction-related business portfolio has struggled recently. Johns Manville, MiTek Industries, Shaw Floors and Acme Brick combined for pre-tax profits of $362 million in 2010, compared with $1.3 billion in 2006. And during that time, the four brands have shed about 9,400 jobs.
Still, all four are continuing to invest in significant improvements or acquisitions. For instance:
• MiTek made five bolt-on acquisitions in the past 11 months;
• Acme Brick spent $50 million to acquire Montgomery, Ala.-based Jenkins Brick & Tile;
• Johns Manville is building in Milan, Ohio, a $55 million plant to make single-ply roofing membrane; and
• Shaw will spend $200 million in 2011 on domestic plants and equipment.
“These businesses entered the recession strong and will exit it stronger,” Buffet wrote in his annual letter to shareholders.
In his widely read missive, the Oracle of Omaha added a characteristic defense of American capitalism. “Throughout my lifetime, politicians and pundits have constantly moaned about terrifying problems facing America,” Buffett wrote. “Yet our citizens now live an astonishing six times better than when I was born. The prophets of doom have overlooked the all-important factor that is certain: Human potential is far from exhausted.”