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The Valspar Corporation (NYSE: VAL) today reported third quarter 2013 net sales of $1.1 billion, up 1% versus the prior year. Reported net income and earnings per diluted share for the current and prior year include several nonrecurring items, which are detailed in the “Reconciliation of Non-GAAP Financial Measures” included in this release. Third quarter 2013 adjusted net income and earnings per diluted share, excluding these nonrecurring items, were $96 million and $1.07 respectively. Third quarter 2012 adjusted net income and earnings per diluted share were $91 million and $0.97, respectively.
“We continue to drive strong volume growth from our new business initiatives in the consumer paint, packaging and wood product lines,” said Gary E. Hendrickson, chairman and chief executive officer. “However, sales and earnings finished slightly below our expectations for the quarter due to continued macro-economic headwinds in key general industrial market segments and certain international regions. Based on our third quarter results and the anticipated impact of these trends, we have updated our annual adjusted EPS guidance to $3.45 to $3.55. We continue to expect improved sales and earnings growth in the fourth quarter, but not at the level we had anticipated earlier in the year.”
Net sales in the Paints segment increased 3% to $455 million in the quarter, driven by strength in U.S. and China. Paints segment adjusted earnings before interest and taxes (EBIT) decreased 0.5% to $52 million, due to increased investments in long-term growth initiatives. Paints segment adjusted EBIT margins decreased approximately (40) bps to 11.5%.
Net sales in the Coatings segment increased 1% to $573 million. Sales growth in packaging, coil and wood product lines was offset by lower demand in the general industrial product line, primarily in coatings for off-road equipment and shipping containers. Coatings segment adjusted EBIT increased 3% to $101 million driven by leverage on increased volumes. Coatings segment adjusted EBIT margins increased in the quarter by approximately 40 bps to 17.6%.