This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

The Valspar's CEO Discusses Q2 2012 Results - Earnings Call Transcript

However, we did experience some headwinds in the quarter. Last year we made the decision to exit a small number of relatively high volume for unprofitable products and customers as part of our restructuring actions. Also in the quarter we saw a year-over-year inventory reduction in our North America home improvement channel. Absentee’s impacts our volumes would have been positive.



Looking at our segment results for the quarter, adjusted for currency and acquisitions, our Coatings segment sales increased 6%. Sales in this segment benefited from pricing a new business, which more than offset uneven market conditions and the exit of unprofitable product lines. Paint segment sales increased roughly 1%.

Growth in China and pricing offset soft market conditions in Australia and last year’s loss of the budding business. In North America, we had extremely strong sell through in our exterior and professional lines, up more than 30%. However, our overall North America paint sales were impacted by the inventory reduction in the home improvement channel as I just mentioned.

Sales in our other segment increased roughly 1%. I’m now going to move into a discussion of our EBIT margins for the quarter. All the numbers I’ll be discussing again exclude restructuring charges and acquisition related charges in the 2011 period. Our Coating segment EBIT margin was 16.6%, up 420 basis points from 12.4% in the second quarter of 2011. The segment benefited from better price cost balance, productivity improvement, exit of unprofitable customers and products, and strong incremental margins on new business.

Our paint segment EBIT margin was 12.5%, up 200 basis points from 10.5% in 2011. This improvement was driven by the benefits of prior restructuring, productivity gains and better price cost balance in Australia. The EBIT margin for our other segment was negative 12.4% compared with 1% in the second quarter last year. This is primarily due to the timing of incentive compensation expense. As a reminder other includes our corporate expenses. The total company EBIT margin for the quarter was 13% compared with 10.9% at the second quarter of 2011.

Read the rest of this transcript for free on seekingalpha.com

3 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,001.22 -38.27 -0.22%
S&P 500 1,988.40 -3.97 -0.20%
NASDAQ 4,538.5510 +6.4470 0.14%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs