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Venesta is First Company Sold by American Standard Bath & Kitchen

American Standard, world leader in the ceramic sanitaryware sector, announced at the start of 2007 the intention to break up the three divisions of activity and to sell the Bath & Kitchen division by the start of the Autumn.

The first sale concerned Venesta, a UK commercial washroom systems business with annual sales of approximately $62 million, to RS Building Products for $165 million, a gain of $57 million, net of taxes. Venesta's products were unique in the Bath and Kitchen portfolio, and sales were limited to the U.K. and Ireland..

‘We are very encouraged by Bath and Kitchen's improved performance', said Fred Poses, chairman and CEO. 'The benefits of increased sales and operational changes are beginning to show up on the bottom line faster than we expected. Our new leadership team, put in place in the third quarter of last year, is making a real impact on our results in Europe and North America, despite significantly lower home builds in the U.S. Asia continues to perform well. Overall, we're pleased with the progress we're making in returning Bath and Kitchen to historical levels of profitability,’ he added.

‘The various steps for the sale of Bath and Kitchen and the spinoff of WABCO are moving ahead nicely, and we're on track to complete the separation process by early fall of this year,’ said Poses. ‘We expect to achieve our goal of completing the separation process with both Trane and WABCO emerging as independent companies with investment-grade balance sheets and debt ratios.’

The Bath & Kitchen division closed 2006 with a turnover of 2.4 billion dollars, of which 54% was made in Europe, 28% in America and 8% in Asia.

American Standard Reports First-Quarter Results

American Standard Companies Inc. announced on April 19th first-quarter net income per diluted share of 84 cents in accordance with Generally Accepted Accounting Principles (GAAP). Sales from continuing operations, which include Air Conditioning Systems and Services and Vehicle Control Systems, were $2.166 billion. Sales for Bath and Kitchen were $657.9 million. In total, sales for the company's three businesses were up 10.7 percent.

Net income per diluted share on an adjusted basis was 58 cents, up 35 percent from first quarter a year ago. The company had provided first-quarter net income per diluted share guidance of 45-49 cents on a GAAP basis and 48-52 cents on an adjusted basis. The company is in the process of selling Bath and Kitchen and, in accordance with GAAP, has classified it as a discontinued operation.

Highlights
* Exceeds guidance for both GAAP and adjusted net income per diluted share for first quarter
* Forecasts better-than-expected earnings for the full year
* Improves Bath and Kitchen performance faster than expected
* Makes good progress on separation plans, on track for Vehicle Control Systems spinoff, Bath and Kitchen sale by early fall

‘We had a very strong first quarter,’ said Fred Poses, chairman and CEO. ‘Air Conditioning Systems and Services had excellent results, driven by strong sales of commercial equipment and services. Those sales more than made up for softer residential market conditions and difficult comparisons with residential sales a year ago, when distributors were stocking new products in preparation for the January 2006 change in energy efficiency regulations. We finished the quarter with strong commercial orders and backlog.

‘Continued growing truck builds in Europe, our global market presence and solid after-market position led to another strong quarter for Vehicle Control Systems, despite a modest impact from the decline in North American truck builds,’ he said. ‘Recent contract wins around the world positioned the business for continued long-term growth.

On March 20th, 2007, the company paid a dividend of 18 cents per share of common stock to shareowners of record on March 1st.

Full-Year, Second-Quarter Guidance
‘For the rest of the year, we see continued strength in global commercial air conditioning that should allow us to more than offset expected softness in residential markets,’ said Poses. ‘We also expect healthy European market conditions and strong performance in Vehicle Control Systems as well as improving results in Bath and Kitchen.’

The company had estimated 2007 net income per diluted share of $3.15-$3.25 on both a GAAP and adjusted basis, representing an increase of 20-24 percent on a GAAP basis and 18-22 percent on an adjusted basis. ‘With our current market and business outlooks, we expect the company as a whole to do better than previously estimated for the year, with net income per diluted share in the range of $3.63-$3.73 on a GAAP basis and $3.30-$3.40 on an adjusted basis,’ said Poses. The company expects to generate about $1.015 billion in net cash provided by operating activities and at least $715 million in free cash flow. The cash flow numbers include a $65 million insurance payment received in the first quarter, but do not include proceeds of the Venesta sale. The full-year guidance provided in this paragraph is based on the company as currently structured and does not consider the effects of the planned company separation.

‘For the second quarter, we estimate sales for the company as a whole to be up about 10 percent, and net income per diluted share in the range of 98 cents-$1.04 on a GAAP basis (up 5-12 percent) and $1.03-$1.09 on an adjusted basis (up 12-18 percent),’ said Poses.

First-Quarter 2007 Business Highlights

BATH AND KITCHEN, now classified as a discontinued operation, had sales of $657.9 million, up 8.1 percent (up 2.7 percent excluding foreign exchange effects) from first quarter a year ago. Income from discontinued operations was $71.9 million net of tax, up from a loss of $7.9 million. Segment income was $105.9 million, up from a loss of $0.5 million in first quarter 2006. The gain from the Venesta sale, absence of depreciation and amortisation (following the decision to sell Bath and Kitchen), improved volume, pricing and mix as well as prior operational consolidations and materials productivity more than offset higher commodity and inventory reduction costs. Adjusted segment income was $14.3 million, compared with $5.5 million in first quarter 2006, excluding the gain from the Venesta sale, favourable impact of foreign exchange and operational consolidation expenses, and including depreciation and amortisation.

At the ISH Fair in Germany, the industry's largest trade show, Bath and Kitchen introduced a number of product lines, including the Imagine suite and its Daylight collection, a modern, linear line with flexible storage solutions. These well-received product launches expanded Bath and Kitchen's lead in providing ‘total bathroom’ suites for consumers. At ISH, Bath and Kitchen also previewed the SoftBath line by award-winning designer Marc Sadler. This wellness line uses a resilient new material that's softer than acrylic and maintains water temperature longer than normal bathtubs. In addition, the business received the Design Plus Award at the fair for its new Active faucet line. Bath and Kitchen continued the rollout of the Imagine suite in Asia and expanded the successful Cadet® 3 toilet line in the U.S. New commercial sales in the quarter included ones for Areeya Property (Bangkok, Thailand); Housing Hartlepool (Hartlepool, U.K.), a 15,000-unit housing project; Incheon Songdo New Town Project (Incheon, South Korea); Royal Pacific Resort (Orlando, Fla.) and Porta di Roma (Rome, Italy), the largest shopping centre in Europe.

Franke Tours The UK With Waterline Roadshow

Franke is currently touring the country as part of the Waterline Roadshow which aims to bring new products to kitchen retailers' doorsteps.

Appreciating that retailers often have to travel long distances to attend industry exhibitions, Franke and other manufacturers are taking part in the roadshow which is currently at Castle Donnington, Derbyshire, and over the next few weeks will be at Sandown Park Race Course, Surrey, Cedar Court Hotel, Bradford and Tatton Park, Cheshire.

The roadshow has already enjoyed great success at Woburn Abbey, Woburn and Tortworth Court, Gloucester, attracting many retailers.

Franke is exhibiting a range of products at the roadshow including three new cooker hoods; the Active, Kubus and Swing hoods, five new taps; the Pot Filler, Davos, Triflow Kubus, Triflow Olympus and SwingSpray taps, and the popular Mythos range of sinks and taps.

Also on display is the Franke WD-751 waste disposer, demonstrating the company's drive to provide products which address consumers' concerns, with the conservation of the environment being a particularly topical subject of late.

John Swain, product manager for Franke UK, said: 'The Waterline Roadshow is an ideal opportunity for us to take our latest products to retailers and talk to them about the specific benefits of the new ranges on a face-to-face basis.'.

PWS Appoints New MD

As part of the company’s continued and ambitious sales growth PWS has appointed Martin Elgood as Managing Director. Effective from 1st May 2007, his brief extends to the management of PWS' sister company Danesmoor UK. Following a 15 year career at Gower, the last 7 as Managing Director, Martin is tasked with the strategic development of the company and to lead it through its next stage of growth.

Comments Mark Stephenson, Chief Executive, 'Martin joins us at an exciting time as both the PWS and Danesmoor divisions are working on major new initiatives to further strengthen product and service offerings to UK customers and in turn continue their enviable record of sales growth. With a strong insight and understanding of customer needs coupled with an unrivalled depth and breadth of experience of the market Martin's skills will prove invaluable to our future development plans.'

Tel: 01325 505500
Web: http://www.pws.co.uk

Big Names + Big Lorries = Even Bigger Presence for GDHA

GDHA's entire fleet of distribution lorries and engineer vans have been given an eye-catching livery makeover, incorporating the latest Stoves, Belling, New World and Lec logos and photography to create real impact on the roads and ensure complete continuity for all of the brands - from advertising through to after sales.

With over 130 dedicated engineers out on the road, customer service forms a key part of the GDHA service, and the introduction of the new livery reflects this by making them instantly recognisable - as well as strengthening brand awareness with consumers across the country.

As the winners of the D&G TEQ award for customer service for the second year running, offering a total after sales service package is a subject close to GDHA's heart. In fact, GDHA not only retained its number one position but once again achieved a record high-quality rating score, beating the previous record it set in 2005. GDHA scored over 90% from independent questionnaires sent to customers following a repair call.

Paula Hodkinson, customer care director at GDHA comments:

‘We are determined to prove to our customers and to the trade that when it comes to customer service, GDHA is a market leader. Throughout the past year we have continued to improve our training programmes to ensure that the customer care team in the office and the engineers on the road are equipped with the tools they need to do their job well. The newly branded vans and lorries are a great example of our commitment to being visible brands for our customers and illustrate the combined force of our customer service and marketing activity.’

Web: http://www.gdha.com

Bathroom Buying Top 10 - Shades Latest Research

Helping builders merchants get to grips with their customer's needs when it comes to fitted furniture shopping, Shades recently commissioned a nationwide survey, with some very interesting results.

Some 278 people across the UK were interviewed while shopping for bathroom products in a wide range of outlets from merchants to independent bathroom boutiques. Respondents were selected to achieve an equal balance between age, gender and social status, with the aim of securing genuinely valuable data that would help Shades in its future product development.

For the merchant data, Shades researchers interviewed a number of buyers and potential buyers of fitted furniture. One of the key most important findings of the survey is the somewhat surprising fact that price is no longer a key driver when it comes to purchasing bathroom furniture in a builder's merchant. Instead, when asked to poll their thoughts on the top buyer criteria, customers selected Quality of construction, The colour scheme and The design of the units before even considering price, which came a lowly fourth on their list of priorities. When asked why they had decided to come to the merchants store to shop for their fitted furniture needs, respondents highlighted the short lead times available, the design service on offer and the local knowledge and friendliness of staff.

‘The interesting point of these findings is that, customers are now more design conscious and quality aware than ever before. This is great news for furniture sales as it means that customers are likely to be tempted by higher-end products, with good looks and durable construction a priority over price,’ explains Julie Holliday, Brand Manager at Shades. For further information of to order your new copy of Shades' new brochure simply call 01937 842394 or log on to http://www.shadesfurniture.co.uk

William Ball's Sensational New Retail Showroom Opens to the Public

William Ball has announced the opening of a new retail showroom at its UK headquarters in Grays, Essex. Packed with displays revealing the very latest in fitted furniture trends, the new showroom is designed to inspire potential customers - showcasing the full design potential of William Ball's collections.

William Ball furniture - which now encompasses kitchens, bedrooms, bathrooms, home office and open-plan living furniture - is available in an impressive selection of units, which come in a wide range of heights and widths, as well as an endless selection of internal storage solutions and accessories. Amongst the highlights of the new showroom is a central island unit - which puts the chef at the centre of the action - as well as all the latest furniture ranges for installation throughout the home.

William Ball is a family-run company that has been manufacturing quality fitted furniture in the UK for nearly half a century. Its Grays headquarters has a dedicated workforce of more than 270 people and the quality of William Ball furniture is considered by many to be amongst the best in the industry. In fact, the FIRA (Furniture Industry Research Association) Gold Award has been obtained for the excellence of William Ball's products. Achieving this prestigious award shows that a product or range of furniture has been evaluated for fitness for purpose, quality and workmanship.

Tel: 0800 581107
Web: http://www.wball.co.uk

Leisure Announces New Distribution Partnership

Leisure, BEKO plc's branded range of kitchen appliances, has secured a key contract with JP Distribution, one of the UK's most high-profile and prolific distributors of kitchens and appliances to independent kitchen retailers. Leisure is now set to have the full range launched in specialist kitchen studios across the UK.

Leisure appliances are designed to provide a contemporary and stylish cooking environment, integrating beautifully with the modern kitchen. The new contract is a key step forward for the brand - which has 170 years of experience in kitchen appliance manufacture - and will dramatically increase brand awareness with the trade customer and provide crucial exposure to the consumer via the independent kitchen specialist.

Huw Buckle, Sales & Marketing Director at BEKO plc, says: ‘The new contract is a fantastic opportunity for us to develop retailer relations and increase our brand share by growing the business within independents. We are very pleased to be working with a company of JP Distribution's standing and expertise and are sure that the partnership will be very successful for both parties. The independent kitchen sector is a key market for Leisure.’

JP Distribution, the West Yorkshire based distributor is uniquely well placed to launch the range within the independent channel.

Tony Oates, Managing Director of JPD commenting on the new contract, said that ‘JPD view BEKO plc as a key trade partner and regard the addition of both the Flavel and Leisure brands as valuable additions to our appliance portfolio.

‘We have already received very positive responses from our trade customers and are currently implementing an aggressive growth plan for the business which will lead to Leisure becoming a key contender in the built in kitchen appliance market.’

The Leisure range is comprised of range cookers, built in ovens, hobs, hoods, dishwashers and fridge-freezers - with varying specifications and price points. They are well qualified to launch in the independent kitchen sector, allowing consumers to create a unique and flexible contemporary cooking environment.

Tel: 0870 7741 066
Web: http://www.leisurecp.co.uk

The Bathroom Manufacturers Association (BMA) was one of the sponsors at this year's Waterwise Water Efficiency Conference - The Economics of Water Efficiency in the Natural and Built Environment - which took place as part of World Water Day between 21st and 22nd March 2007.

Held in Oxford, the event attracted leading policy makers, doers and thinkers on water efficiency, both as speakers and participants including Barbara Young, Chief Executive of the Environment Agency; Pamela Taylor, Chief Executive of Water UK; and, Bengt Pihl, Chief Executive of Sanitec.

Flying the flag for bathroom manufacturers, Pihl told delegates that although the message from Government to manufacturers had been to save water efficiently without causing problems, the task was not so simple.

Manufacturers, explained Pihl, have to consider product availability; design for the mass market; and, water efficient systems that can cope with the UK's current drainage systems, which often rely on larger amounts of water to remove waste effectively.

In addition, he said, manufacturers must ensure their water efficient products comply with all standards and that they are competitively priced.

Pihl assured delegates that manufacturers are working hard to help Government meet its water saving targets in reducing consumption from the current 150 litres per person, per day to approximately 125 litres per person, per day.

Since the Waterwise Conference, the BMA has announced its Labelling Scheme for water efficient bathroom products, which has been well received by Government, demonstrating to all stakeholders that manufacturers are taking the issue of water efficiency seriously and doing something about it.

Commenting on the BMA's involvement in the Waterwise conference, BMA Chief Executive Yvonne Orgill says: 'All delegates at the Waterwise Conference agreed that only collectively we can make a real difference and we must educate.

'The BMA believes Government, water utilities and other related trade and consumer bodies must work together to implement greater awareness campaigns via educational and media routes, as we will not make significant water savings unless the consumer is properly educated.

'The BMA is playing its part in this with the announcement of the Labelling Scheme and other ongoing water efficiency initiatives. It will be interesting to see what action other stakeholders take.'

Tel: 01782 747123
Web: http://www.bathroom-association.org
Web: http://www.waterwise.org

Broughtons Introduces Jasper Morrison

Broughtons, the national distributor of sanitary ware and bathroom furniture has introduced Ideal Standard's latest designer suites to its portfolio.

The contemporary collection, created by leading British designer Jasper Morrison, was first previewed at 100% Design, and is a design-led bathroom range of sanitary ware, furniture and brassware fittings. It was his desire to focus on essential functionality for everyday use. The Jasper Morrison range is sensuous and modern, with a softness created through rounded, square shapes on the outside and ovals on the inside.

To launch the range to retailers, Broughtons has dedicated pages in the company’s latest retailer communication, 'The Plug'. There are six enticing display offers. Chris Honer, Sales Director comments: ‘This is a superb sanitary ware range from Ideal Standard. We are fortunate to have such an early opportunity to market with this beautiful creative range and to extend this to retailers nationwide. It is a superb collection that looks the part and is designed with functionality top of mind. Supported by our extensive logistics and customer focused service, we have the expertise to get it to our retail partners fast and efficiently.’

The Jasper Morrison collection from Broughtons not only attracts profitable display deals, there is also the opportunity for retailers to earn M&S vouchers on every suite purchased until June 2007.

Brian Grey, Marketing Manager for Ideal Standard comments: ‘Broughtons is highly renowned for excellence through service and availability and in taking products to the retailer quickly and efficiently. We value the company’s expertise in national distribution, stocking capability, fast and efficient next day national delivery combined with a friendly and knowledgeable team. Broughtons is an expert in all that it does.’

For further information on the Jasper Morrison collection from Broughtons contact your Area Sales Manager or call Broughtons Contact Centre: 0870 60 60 601 or visit the website at http://www.broughtoncrangrove.co.uk

For information on Ideal Standard call: 0800 590 311 or visit the website at http://www.ideal-standard.co.uk

Foresight Design Conference: Housing from Heaven

CMPi, organiser of The Interiors Event, has set up a partnership with Johnny Grey, designer, cultural influencer and author to establish a programme of conferences in the design and construction sectors of the industry.

The conferences will challenge current thinking, help interpret consumer needs and enable designers to translate the future needs of society with greater accuracy. Inspirational and forward thinking, Foresight will focus on one day conferences throughout 2007 and into 2008.

The Housing from Heaven conference will take place on June 22nd 2007 at RIBA (Royal Institute of British Architects), London. This conference is aimed at architects, house builders, developers, interior designers, planners and the construction industry. Leading experts have been asked to talk about their vision and frustrations, as well as their solutions, and to debate some of the major issues faced so that the art of creating homes can be relearned.

Housing from Heaven will consist of the following sessions:
* A designer's challenge; from mistrust, to creativity and shared interests: How to work with house builders and how they can work with designers. Wayne Hemmingway, Chairman of Building for Life

* Placemaking. Ben Derbyshire, HTA Architects

* Valuing design, sustainability and the economics of housing. Yolande Barnes, Savills

* Managing Creatives from the house builders side Nick Johnson, Urban Splash

* The end of rooms: the interior rethought. From psychology to the latest findings in neuroscience the place we call Home as more complexity and opportunity for sociable living. Johnny Grey, Designer

* A modern vision for houses and apartments Alison Brooks, practising architect and planner

* Living Villages, making collective living and sustainability work. Bob Tomlinson, MD of Living Villages

* Panel Discussion: Implementation of change - All speakers

There will be morning and afternoon sessions, with lunch and refreshments served throughout the day followed by a drinks reception.

For more information and to book your tickets to Housing from Heaven, the first Foresight Design Conference, visit http://www.foresight-design.co.uk.

More conferences will take place throughout 2007 including Mapping the Future Kitchen, The Gourmet Bathroom and The Emotionally Intelligent House.

Chartley Aiming High with Gessi Brassware

As sole distributor throughout the UK of luxury Italian tap manufacturer Gessi, Chartley Brassware of Stone, Staffordshire has appointed Helen K Marketing to work with the media to increase the profile of this successful partnership.

From a standing start in 1998, Chartley has achieved success with the Gessi range of design led, premium quality taps, showers and accessories and it is now displayed in over 350 luxury bathroom retailers across the UK. This recently culminated in a visit to the Gessi HQ in Italy for some top performing retailers where future plans for improving the offer and range were unveiled.

Chartley also enjoys success with Gessi products in the Contracts market, supplying to upscale residential and Hotel developments where the combination of premium quality products and exacting customer service are pre-requisites.

About Gessi
Gessi is Italy's largest manufacturer of brassware. This company was started also in 1998 and has shown amazing growth over what essentially is a relatively short period in brassware history. The company’s modern factory is located North West of Rome and houses state of the art design and manufacturing facilities. Gessi is setting its sights on further expansion with the UK market being central to its growth ambitions.

The Range
Designed for the modernist, Gessi brassware is ultra chic, yet functional. From the squared, bold designs of the Rettangolo range to the subtle curves of the Ovale range, there is a wide choice of designs and styles including deck, floor and wall mounted mixer taps in each of the ranges. Shower heads, columns, valves, rails and body jets complete the brassware offer, whilst a matching range of luxury accessories provides the finishing touch. All ranges are manufactured using only the highest quality DZR brass which is totally lead free. Gessi also offers some of the most luxurious finishes including brushed nickel, which in recent years has seen a huge increase in popularity. Future designs see a definitive swing in the market for mood lighting and 2008 will see the launch of several new light and sensor taps.

Chartley Ltd
Operating from a purpose-designed office and warehouse located in Central England and close to major motorway routes for excellent transport and delivery schedules, Chartley was appointed sole distributor in the UK of the Gessi range in 2003.

Having worked successfully together for 5 years previous to this Chartley proved that the company had an effective strategy for the bathroom sector for Gessi products. Up to that point, Paul Roberts, the company's founder and MD, had been operating a highly successful assembly business offering a unique set of brassware products which still today continue to sell well under the Chartley banner.

The Sherwood, Warwick, Conway and Huntley ranges offer the customer a choice of styles which they can mix and match to create the ideal tap for their bathroom. A range of heads and finishes, such as the Swarovski Crystal heads or the Crosshead, for example, can be chosen by the customer and incorporated onto the body of the tap. It is assembled to order by Chartley ready for installation at the customer's home.

Future Developments
‘Chartley is a company that never sits still. New developments are being planned and we look forward to announcing these to you very shortly.’

Tel: 01785 811836

REHAU Rewards Design Excellence

Edgeband and furniture component specialist REHAU is supporting excellence in design and creativity by sponsoring the 2007 Open Exhibition for artists in Herefordshire.

The Exhibition, which takes place in September, is the centrepiece of the annual h-Art event organised by Herefordshire Council's Cultural Service which showcases work from the leading artists in the county.

REHAU is offering a cash prize to the artist with the winning submission to the exhibition, as well as the opportunity to exhibit both at its UK headquarters in Ross on Wye and at the REHAU-ART facility in Germany. As a polymer specialist, the company is particularly interested in rewarding 3D work and work that uses materials in innovative ways.

Martin Hitchin, Chief Executive of REHAU in the UK, said: ‘REHAU has a continual focus on design and creative solutions - across our building solutions, automotive, and industrial divisions. This was reinforced with the launch of our new brand and identity exactly a year ago.

‘We hope this sponsorship demonstrates our commitment to the very best in design, as well as giving us a positive and inspirational link with our regional community.’

Representatives from REHAU will join the judging panel to select the winning artist during June 2007 and the UK exhibition will take place in September. The exhibition in Germany is expected to take place during 2008.

Tel: 01989 762600
Email: Irene.Smith@rehau.com

HSE Issues Gas Fitter Warning after Barrow Heating Company Fined Over Faulty Boiler Installation

On 24th April the Health and Safety Executive (HSE) warned Cumbrian businesses and residents to check that gas workers are appropriately accredited by CORGI before allowing them to carry out gas fitting or repair work.

The warning comes after a Barrow heating company was £2,000 and ordered to pay £2,732.00 costs after pleading guilty at Barrow Magistrates Court to two criminal charges brought by HSE over the faulty installation of a boiler at a property in Barrow by an employee who was not registered with CORGI.

Andrew John Major was a director and employee of Lakeland Underfloor Heating Specialists Limited of Brow Avenue, Newbarns in Barrow and was involved in installing a Wolf combi boiler in the loft at Bank House Farm at Broadgate in Hallthwaites.

Following a dispute with the property owner about Mr Major's CORGI registration, another registered firm discovered a leak where a pipe connected to the boiler and other installation faults.

The company pleaded guilty to two charges of two charges:

* that it had breached Regulation 3(3) of the Gas Safety (Installation and Use) Regulations 1998 by allowing a person not a member of a class of persons approved for the time being by HSE to carry out installation work on the boiler;
* and that work on the boiler was not carried out in accordance with appropriate standards and in such a way as to prevent danger to any person, in contravention of Regulation 5(3).

HSE Inspector Clint Backhouse said:
‘Gas appliances that are faulty or poorly installed can lead to death from carbon monoxide poisoning and fire or explosion. That is why the law requires those working on them to be fully trained and registered with CORGI.

‘Fortunately there were no injuries or fatalities in this case, but the potential for disaster was there. It was first discovered there was a problem with the boiler installation because the engineer brought in by the property owner detected a strong smell of gas when entering the loft at the outset.

‘It was very fortunate that the leaked gas had not found a source of ignition by then. This occurrence has shown, fortunately without serious consequences, how important it is for anyone carrying out work on gas systems to possess the necessary expertise, something that the statutory registration scheme run by CORGI is there to ensure.’

Masco Corporation Business and Financial Highlights First Quarter 2007

Net sales from continuing operations declined nine percent, with North American sales declining 15 percent and International sales increasing 21 percent. In local currencies, International sales increased 10 percent compared with the first quarter of 2006.

Key retailer sales from continuing operations declined two percent in the 2007 first quarter compared with an increase of seven percent in the 2006 first quarter and a decline of seven percent in the 2006 fourth quarter.

Sales changes by segment in the first quarter of 2007 versus the first quarter of 2006 were:

* Cabinets and Related Products sales declined 19 percent;
* Plumbing Products sales increased seven percent;
* Installation and Other Services sales declined 21 percent;
* Decorative Architectural Products sales increased seven percent; and
* Other Speciality Products sales declined 13 percent.

International sales were strong, particularly for plumbing products, due to stronger European economies, market share gains and the favourable effect of currency translation.

Income from continuing operations was $142 million or $.37 per common share and $207 million or $.50 per common share in the first quarters of 2007 and 2006, respectively.

Net income in the first quarter of 2007 was $143 million or $.37 per common share, including income from discontinued operations, net, of $1 million. Net income in the first quarter of 2006 was $204 million or $.50 per common share after giving recognition to the cumulative effect of an accounting change, net, of $3 million or $.01 per common share related to stock-based compensation.

In addition, results benefited from net gains of $.04 and $.01 per common share related to financial investments in the first quarters of 2007 and 2006, respectively.

First quarter 2007 results, seasonally the lowest quarter of the year, were adversely affected by lower sales volume of installation and other services, assembled cabinets and windows and doors in the new home construction market, lower retail sales volume of ready-to-assemble and assembled cabinets and a less favourable product mix. Results were aided by increased sales volume of paints and stains and increased sales from International operations, particularly plumbing products.

As part of its profit improvement programmes, the Company has been focused on the rationalisation of its businesses, including sourcing programmes, business consolidations, plant closures, headcount reductions and other initiatives. During the first quarters of 2007 and 2006, the Company incurred costs and charges of $25 million pre-tax ($.04 per common share, after tax) and $17 million pre-tax ($.03 per common share, after tax), respectively, related to profit improvement programmes. Offsetting these charges in the first quarter of 2007 were lower stock-based compensation expense and gain on the sale of corporate fixed assets aggregating $12 million pre-tax ($.02 per common share, after tax) and the previously discussed income related to financial investments of $.04 per common share, after tax.

Gross margins were 26.2 percent in the first quarter of 2007 compared with 27.6 percent in the first quarter of 2006. Operating profit margins, as reported, were 8.9 percent in the first quarter of 2007 compared with 11.2 percent in the first quarter of 2006. Operating profit margins in the first quarters of 2007 and 2006 include the negative effect of reduced sales volume in 2007 and costs and charges related to profit improvement programmes in both years.

Outlook for 2007
While results in the first quarter of 2007 were substantially below the strong first quarter of 2006, reflecting a decline of approximately 30 percent in housing starts, sales and earnings were better than the Company anticipated when it issued its full-year 2007 earnings guidance in February. At that time, the Company anticipated that first quarter net sales would be down low-double digits, compared with the actual decline of nine percent.

Economic conditions, however, remain uncertain in the Company's markets, and certain commodity costs, which had stabilised or declined, have recently increased once again. Housing starts have declined dramatically in the last 12 months due to previous excessive speculative buying, rapidly rising home prices in recent years reducing affordability and less attractive mortgage terms. Even with the recent decline in new home construction, the inventory of unsold new and existing homes has remained at unprecedented high levels. As a result, the Company has lowered its 2007 housing starts estimate to between approximately 1.4 million to 1.5 million. In addition, we continue to see a moderation in consumer spending for certain ‘big ticket’ home improvement items, such as cabinets, and currently estimate that 2007 full-year sales will decline low-to-mid single digits compared with 2006.

The Company believes that the negative impacts of its downward revision in estimated housing starts to a range of approximately 1.4 million to 1.5 million from approximately 1.5 million to 1.7 million, assumed in its original guidance given in February, and increased commodity costs will be largely offset by a combination of the stronger-than-expected first quarter results, the continued strength related to International operations, including the favourable effect of currency translation, share repurchases and the profit improvement programmes we are pursuing. Accordingly, at this time the Company, assuming no further escalation in commodity costs, estimates that 2007 full-year earnings will approximate $1.50 to $1.70 per common share, instead of its original guidance of ‘$1.50 or less to $1.80 per common share or more’ The above guidance includes approximately $60 million pre-tax ($.10 per common share, after tax) of costs related to plant start-up, severance, systems implementations and plant closures.

The Company expects to continue to return a minimum of $1 billion annually to shareholders, on average, through share repurchases and dividends as part of its ongoing commitment to value creation. The Company has returned $4.8 billion to shareholders over the last four calendar years including the repurchases of 126 million common shares and dividends. In addition, the first quarter of 2007, the Company returned $361 million to shareholders through share repurchases (nine million common shares) and dividends.