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A full declaration regarding forward-looking statements is provided in the company’s earnings release, transmitted earlier this morning. After the review of Second Quarter results, we will open this session to questions. I will now turn the call over to Bob Wells. (Operator Instructions)Bob Wells Thanks, Jackie. In order to allow more time for questions, we’ve provided balance sheet items and other selected information on our website at sherwin.com, under Investor Relations Second Quarter Press Release. Summarizing overall company performance for the Second Quarter 2010 verus Second Quarter 2009; consolidated net sales increased $195.2 million, or 10% to $2.14 billion to primarily to improve architectural sales, acquisition, and favorable foreign currency translation rate changes. Acquisition increase net sales by 1.9% in the quarter, and favorable currency translation rate increased consolidated net sales 1.3%. Consolidated gross profit dollars increased $76.5 million for the quarter to $971.9 million. Gross margin decreased 60 basis points to 45.4% of sales from 46% in the Second Quarter last year. Selling, general and administrative expenses to the quarter increased 5.9% to $691.2 million. At the percent of sales, SG&A decreased to 32.3% in the Second Quarter this year from 33.5% last year. Interest expense, increased $16 million compared to the Second Quarter last year. Consolidated profit before taxes in the quarter increased $27.1 million or 11.7% to $259.2 million. Our expected tax rate in the Second Quarter this year was 29.9% compared to 31.9% in the Second Quarter of 2009. For the full year of 2010, we expect our effected tax rate to be approximately 33%. Consolidated net income, increased $23.7 million to $181.7 million from $158 million in the Second Quarter of 2009. Net income at the percent sales was 8 1/2 % compared to 8.1% in the Second Quarter last year. Diluted net income for common share for the quarter increased 21 1/2% to $1.64 per share, from $1.35 per share in 2009.
Looking at our results by operating segments, sales for our paint store group in the Second Quarter, 2010 increased 6.4% to $1.24 billion. Comparable store sales, sales by stores open more than 12-calender months, increased 5.9%. The increase in sales for the segment was due to improved domestic architectural paint sales, primarily to residential repaint contractors and improving protective and marine product sales.Regionally in the Second Quarter, our Eastern Division led all division, followed by Southeastern Division, Midwestern Division, and Southwestern Division. Sales by all four paint stores divisions increased in the Second Quarter compared to last year. Segment profit for the group, increased 9 1/2% to $212 million in the Second Quarter 2010. Segment margin, increased to 17% from 16 1/2 % due primarily to higher sales volume and effective SG&A control. During the Second Quarter, paint store group opened seven new stored and closed four redundant store locations. Turning to our consumer group, sales in the Second Quarter increased 11.9% to $410.2 million. The increase was due primarily to improving demand at some of the segment’s retail, industrial, and institution customers. Segment profit for the consumer group increased 22.1% in the quarter to $80.7 million. Segment profit at the percent of external sales, increased in 19.7% from 18% in the same period last year, due primarily to effective cost control and cost savings realized from previous year’s site rationalizations that were practically offset by raw material cost increases. For our global finishes group, sales in U.S. dollars increased 18.8% to $486.5 million in the quarter, due primarily to acquisition, favorable currency, translation, rate changes, and higher paint sales volume. For the quarter, acquisition increased global finishes group net sales by 9.2%, and favorable currency translation rate changes, added 5% to net sales in U.S. dollars. Second Quarter segment profit, increased 28.2% to $40 million, due to higher sales volume, good expense control, and currency translation. The combined effect of positive foreign currency rate changes, and a negative impact of acquisition’s, including all transaction cost, slightly reduced global finishes group, segment profit in the quarter. Read the rest of this transcript for free on seekingalpha.com