Valspar Reports Second-Quarter Results

At the end of the release, please note the added Other Financial Data table.

The corrected release reads:

VALSPAR REPORTS SECOND-QUARTER RESULTS

Company Raises Fiscal 2012 Guidance to $3.20 to $3.30 from $2.92 to $3.12

The Valspar Corporation (NYSE:VAL) today reported its results for the second-quarter ended April 27, 2012.

Second-quarter sales totaled $1.03 billion, a 4 percent increase from the second quarter of 2011. Second-quarter adjusted net income per share increased to $0.84 in 2012, a 31 percent increase from $0.64 in 2011. Second-quarter adjusted net income per share in 2012 excludes $0.04 per share in restructuring charges. Second-quarter adjusted net income per share in 2011 excludes $0.05 per share in acquisition-related charges and $0.01 per share in restructuring charges. Net income for the second quarter of 2012 was $76.5 million and reported earnings per share were $0.80. Net income for the second quarter of 2011 was $56.3 million and reported earnings per share were $0.58.

“We were pleased with our performance in the quarter,” said Gary E. Hendrickson, president and chief executive officer. “Our earnings growth was driven by new business in our industrial product lines, better price-to-cost balance, productivity improvements and benefits from last year’s restructuring actions. Our volume trend improved sequentially in both our Coatings and Paint segments in the quarter. Looking ahead to the rest of the year, we are raising adjusted full year earnings per share guidance to $3.20 to $3.30, reflecting our expectation of further volume growth and continued execution of our key operational initiatives.”

Hendrickson and Lori A. Walker, senior vice president and chief financial officer, will conduct a conference call for investors at 10:00 a.m. Central Time (11:00 a.m. Eastern Time) today. The call can be heard live over the Internet at Valspar’s website at www.valsparcorporate.com under Investor Relations. Those unable to participate during the live broadcast can access an archive of the call on the Valspar website. A taped delay of the call will also be available from 12:30 p.m. Central Time May 15 through Midnight on May 31 by dialing 1-800-475-6701 from within the U.S. or 320-365-3844 from outside of the U.S., using access code 247418.

The Valspar Corporation (NYSE: VAL) is a global leader in the paint and coatings industry. Since 1806, Valspar has been dedicated to bringing customers the latest innovations, the finest quality and the best customer service in the coatings industry.

FORWARD-LOOKING STATEMENTS Certain statements contained in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this report constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. Forward-looking statements are based on management’s current expectations, estimates, assumptions and beliefs about future events, conditions and financial performance. Forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside our control and could cause actual results to differ materially from such statements. Any statement that is not historical in nature is a forward-looking statement. We may identify forward-looking statements with words and phrases such as “expects,” “projects,” “estimates,” “anticipates,” “believes,” “could,” “may,” “will,” “plans to,” “intend,” “should” and similar expressions. These risks, uncertainties and other factors include, but are not limited to, deterioration in general economic conditions, both domestic and international, that may adversely affect our business; fluctuations in availability and prices of raw materials, including raw material shortages and other supply chain disruptions, and the inability to pass along or delays in passing along raw material cost increases to our customers; dependence of internal sales and earnings growth on business cycles affecting our customers and growth in the domestic and international coatings industry; market share loss to, and pricing or margin pressure from, larger competitors with greater financial resources; significant indebtedness that restricts the use of cash flow from operations for acquisitions and other investments; dependence on acquisitions for growth, and risks related to future acquisitions, including adverse changes in the results of acquired businesses, the assumption of unforeseen liabilities and disruptions resulting from the integration of acquisitions; risks and uncertainties associated with operations and achievement of profitable growth in developing markets, including Asia and Central and South America; loss of business with key customers; damage to our reputation and business resulting from product claims or recalls, litigation, customer perception and other matters; our ability to respond to technology changes and to protect our technology; changes in governmental regulation, including more stringent environmental, health and safety regulations; our reliance on the efforts of vendors, government agencies, utilities and other third parties to achieve adequate compliance and avoid disruption of our business; unusual weather conditions adversely affecting sales; changes in accounting policies and standards and taxation requirements such as new tax laws or revised tax law interpretations; the nature, cost and outcome of pending and future litigation and other legal proceedings; and civil unrest and the outbreak of war and other significant national and international events. We undertake no obligation to subsequently revise any forward-looking statement to reflect new information, events or circumstances after the date of such statement, except as required by law.

THE VALSPAR CORPORATION
COMPARATIVE CONSOLIDATED EARNINGS
For the Quarters Ended April 27, 2012 and April 29, 2011
			Second Quarter								Year-to-Date
(Dollars in thousands, except per share amounts)			(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)
			2012				2011				2012				2011
Net Sales			$	1,032,572			$	992,729			$	1,918,219			$	1,835,133
Cost of Sales				677,132				677,219				1,269,463				1,260,710
Gross Profit				355,440				315,510				648,756				574,423
Research and Development				29,442				30,059				56,335				57,883
Selling, General and Administrative				195,330				185,935				371,038				353,636
Operating Expenses				224,772				215,994				427,373				411,519
Income (Loss) From Operations				130,668				99,516				221,383				162,904
Interest Expense				19,288				15,486				35,077				31,045
Other (Income) Expense, Net				366				(17)				(156)				547
Income (Loss) Before Income Taxes				111,014				84,047				186,462				131,312
Income Taxes				34,474				27,739				54,140				41,577
Net Income (Loss)			$	76,540			$	56,308			$	132,322			$	89,735
Average Number of Shares O/S - basic				92,068,366				94,432,627				92,464,748				95,646,147
Average Number of Shares O/S - diluted				95,094,369				97,497,045				95,342,549				98,570,609
Net Income (Loss) per Common Share - basic			$	0.83			$	0.60			$	1.43			$	0.94
Net Income (Loss) per Common Share - diluted			$	0.80			$	0.58			$	1.39			$	0.91

NON-GAAP FINANCIAL MEASURES In the accompanying press release, management has reported non-GAAP financial measures - "Adjusted net income per common share – diluted” and "Full year guidance for adjusted net income per common share - diluted". Management discloses these measures because we believe the measures may assist investors in comparing our results of operations in the respective periods without regard to the effect on results of (i) after-tax restructuring charges and (ii) after-tax acquisition-related charges.

NON-GAAP RECONCILIATION The following is a reconciliation of "Net income per common share - diluted" to "Adjusted net income per common share - diluted" for the periods presented:

			Second Quarter									Year-to-Date
			2012				2011					2012				2011
Net Income per Common Share - diluted			$	0.80			$	0.58				$	1.39			$	0.91
Restructuring Charges				0.04				0.01					0.07				0.02
Acquisition-related Charges				-				0.05					-				0.09
Adjusted Net Income per Common Share - diluted			$	0.84			$	0.64				$	1.46			$	1.02
The following is a reconciliation of "Forecasted Net Income per Common Share - diluted" to our "Full Year Guidance" for the period presented.
								Full Year
								2012
Forecasted Net Income per Common Share - diluted								$	3.09 - $3.19
Restructuring Charges								$	0.11
Full Year Guidance for Adjusted Net Income per Common Share - diluted								$	3.20 - $3.30

			April 27,				October 28,				April 29,
(Dollars in thousands)			2012				2011				2011
Assets			(Unaudited)				(Note)				(Unaudited)
Current Assets:
Cash and Cash Equivalents			$	208,491			$	178,167			$	120,051
Restricted Cash				21,309				20,378				16,977
Accounts and Notes Receivable, Net				738,706				664,855				708,495
Inventories				391,562				336,750				431,237
Deferred Income Taxes				49,303				50,685				49,850
Prepaid Expenses and Other				86,812				74,302				79,391
Total Current Assets				1,496,183				1,325,137				1,406,001
Goodwill				1,064,189				1,058,006				1,385,406
Intangibles, Net				555,654				553,286				654,774
Other Assets				20,382				13,560				14,967
Long Term Deferred Income Taxes				1,936				1,909				4,902
Property, Plant & Equipment, Net				540,926				548,253				573,852
Total Assets			$	3,679,270			$	3,500,151			$	4,039,902
Liabilities and Stockholders' Equity
Current Liabilities:
Short-term Debt			$	9,138			$	169,516			$	354,467
Current Portion of Long-Term Debt				200,000				207,803				-
Trade Accounts Payable				471,471				463,580				473,794
Income Taxes				27,433				17,684				35,579
Other Accrued Liabilities				347,156				401,350				319,371
Total Current Liabilities				1,055,198				1,259,933				1,183,211
Long Term Debt, Net of Current Portion				1,061,875				679,805				903,031
Deferred Income Taxes				210,352				214,920				263,503
Other Long Term Liabilities				139,893				132,943				155,316
Total Liabilities				2,467,318				2,287,601				2,505,061
Stockholders' Equity				1,211,952				1,212,550				1,534,841
Total Liabilities and Stockholders' Equity			$	3,679,270			$	3,500,151			$	4,039,902
NOTE: The Balance Sheet at October 28, 2011 has been derived from the audited consolidated financial statements at that date.

THE VALSPAR CORPORATION
OTHER FINANCIAL DATA
For the Quarters Ended April 27, 2012 and April 29, 2011
(Dollars in thousands)
				Second Quarter										Year-to-Date
				2012				2011						2012				2011
				(Unaudited)				(Unaudited)						(Unaudited)				(Unaudited)
I. Comparison year over year
	Gross Profit, as a percentage of net sales (1)
		Gross Profit, reported			34.4	%			31.8	%					33.8	%			31.3	%
		Gross Profit, adjusted (2)			34.6	%			32.3	%					34.1	%			32.0	%
	Operating Expense as a percentage of net sales (1)
		Operating Expense, reported			21.8	%			21.8	%					22.3	%			22.4	%
		Operating Expense, adjusted (2)			21.5	%			21.5	%					22.0	%			22.3	%
	Operating Profit (Loss), as a percentage of net sales (1)
		Operating Profit, reported			12.7	%			10.0	%					11.5	%			8.9	%
		Operating Profit, adjusted (2)			13.1	%			10.9	%					12.0	%			9.8	%
				Second Quarter										Year-to-Date
				2012				2011						2012				2011
II. Segment Data				(Unaudited)				(Unaudited)						(Unaudited)				(Unaudited)
	Sales
		Coatings		$	540,825			$	509,136					$	1,035,474			$	965,525
		Paint			426,311				418,380						765,868				754,331
		All Other less intersegment sales			65,436				65,213						116,877				115,277
		Total		$	1,032,572			$	992,729					$	1,918,219			$	1,835,133
	Earnings Before Interest and Taxes (EBIT) (1)
		Coatings		$	89,124			$	59,913					$	162,996			$	110,738
		Paint			49,322				38,964						72,687				58,477
		All Other			(8,144	)			656						(14,144	)			(6,858	)
		Total		$	130,302			$	99,533					$	221,539			$	162,357
	Earnings Before Interest and Taxes (EBIT) (1), adjusted (2)
		Coatings		$	89,770			$	63,234					$	164,031			$	115,055
		Paint			53,094				43,873						80,485				70,293
		All Other			(8,144	)			656						(13,462	)			(6,858	)
		Total		$	134,720			$	107,763					$	231,054			$	178,490

(1)		Certain amounts in prior year financial statements have been reclassified to conform with the 2012 presentation.
(2)		Excludes restructuring charges in all periods and acquisition-related charges in the 2011 periods.

1 2 Next › Last »