PaintSquare.com
Follow us on Twitter Follow us on LinkedIn Like us on Facebook Follow us on Instagram Visit the TPC Store
Search the site

 

Advertisement

PaintSquare


Coatings Industry News

Main News Page


Industrial Coatings Hold Back Valspar

Wednesday, November 20, 2013

More items for Coating Materials

Comment | More

Struggling sales of general industrial coatings fueled a 14 percent fourth-quarter decline in profits at the Valspar Corp., the company reported Tuesday (Nov. 19).

Restructuring costs and weakness in other markets also dragged on the Minneapolis-based manufacturer, despite record fourth-quarter paint sales.

Valspar reported a fourth-quarter net paint sales increase of 13 percent to $449 million, driven largely by strong growth in the U.S. and new business, the company said in announcing its quarterly and full-year results.

ValsparSales
Images: Valspar Corp.

The Valspar Corp. offered this snapshot of its 2012 business in a recent presentation to its investors.

General industrial coatings fared less well, giving the company an overall 2 percent increase in net sales for fiscal year 2013, the company said.

Overall, the company's quarterly profit declined by 14 percent. For the period that ended Oct. 25, Valspar reported a profit of $63.5 million, or 72 cents a share, down from $73.8 million, or 79 cents a share, a year earlier.

Quarterly, Yearly Overviews

Overall, the company reported these fourth-quarter highlights:

  • Net sales were $1.1 billion, up 8 percent over the prior year.
  • Adjusted net income and earnings per diluted share, excluding nonrecurring acquisition and restructuring items, were $86 million and $0.97, respectively. Fourth-quarter 2012 adjusted net income and earnings per diluted share were $80 million and $0.86, respectively.
  • Strong performance was reported in the U.S., where fourth-quarter net sales increased 12 percent, led by the consumer paints, coil and wood product lines.
CoatingIndustryComparison

Valspar sliced the $98 billion global coatings pie this way for its investors in a presentation in October.

For fiscal year 2013, the company reported:

  • Net sales were $4.1 billion, up 2 percent over the prior year.
  • Adjusted net income and earnings per diluted share, excluding nonrecurring items, were $320 million and $3.54, respectively. Fiscal year 2012 adjusted net income and earnings per diluted share were $310 million and $3.28, respectively.

On the liability side, the company noted, among other items, that it was carrying $441 million in short-term debt as of Oct. 25, compared to $94 million at the same point in the prior year.

'Good Finish'

Chairman and CEO Gary E. Hendrickson said the fourth quarter had brought "a good finish to the year, as growth in both sales and operating income improved from previous quarters."

He added: "Sales growth was led by strong performance in our U.S. Consumer, Wood and Coil product lines and by the acquisition of Inver," a European industrial coatings concern that Valspar acquired over the summer.

The cost of the Inver acquisition was not disclosed. The company specializes in liquid and powder coatings and resin products used in a variety of industrial applications.

“We saw the benefit of new business wins in all product lines," Hendrickson said. "These wins were partially offset by weakness in certain end markets and international regions, as has been the case throughout 2013.”

Paints Segment Results

In addition to the Valspar brand, the company's paint portfolio includes Cabot Stains, Plasti-Kote, and McCloskey Special Effects.

Along with the fourth-quarter double-digit net sales gains in the paints segment, adjusted earnings before interest and taxes (EBIT) increased by 10 percent to $49 million.

However, the paints segment adjusted EBIT margins decreased about 40 basis points (bps) to 11 percent, which Valspar said "reflects the continued investments in growth initiatives."

Valspar-Paint

Fourth-quarter net paint sales increase by 13 percent to $449 million, driven largely by strong growth in the U.S. and new business, Valspar said.

For the year, paints segment net sales increased by 4 percent to $1.7 billion, again driven by growth in the U.S. and new business, which was partially offset by weakness in international markets. Adjusted EBIT for the year increased by 3 percent to $183 million; adjusted EBIT margins decreased by approximately 10 bps to 11 percent.

Coatings Segment Results

Net sales in the coatings segment increased by 5 percent to $602 million in the fourth quarter of 2013.

Weakness in the general industrial line offset sales growth from the Inver acquisition and from the coil and wood product lines, the company said.

Coatings segment adjusted EBIT for the fourth quarter decreased 2 percent to $93 million, and EBIT margins decreased by about 120 bps to 15.5 percent. For the year, coatings segment sales inched up 2 percent to $2.2 billion.

ValsparIndustrialCoatings

Weakness in industrial coatings contributed to a 2 percent decline in adjusted EBIT for the coatings segment in FY 2013. Segment sales increased 5 percent in Q4.

Coatings segment adjusted EBIT for the year decreased 2 percent to $352 million, and EBIT margins decreased by about 50 bps to 15.9 percent.

Growth Outlook

For the new fiscal year, Valspar forecast per-share earnings of $3.95 to $4.15 and total sales growth of 7 percent to 9 percent. Analysts polled by Thomson Reuters most recently expected per-share profit of $4.12 and revenue growth of 9 percent, Dow Jones reported.

“We expect stronger sales and earnings growth through continued new business, benefits from acquisitions, a stable U.S. market and through our productivity initiatives," said Henderson.

Valspar's most recent Investor Presentation is available here. The presentation reports, among other data, that Valspar's EBIT margin in 2012 was higher than AkzoNobel's, PPG's, RPM's and Sherwin-Williams'.

   

Tagged categories: AkzoNobel; Architectural coatings; Axalta; Earnings reports; Market; Paint and Coating Sales; PPG; Sherwin-Williams; Valspar

Comment Join the Conversation:

Sign in to our community to add your comments.

Advertisements
 
Carboline Company
 
History. Service. Innovation.
 
We are a global leader in coatings, linings, and fireproofing. We have the right people, right products, and right locations.
 

 
BASF
 
New resins from BASF will have metals loving water!
 
Excellent corrosion resistance, low VOC, high gloss, thin films www.basf.us/industrialcoatings dpsolutions@basf.com 800-231-7868
 

 
PPG Protective and Marine Coatings Group
 
We Protect and Beautify the World
 
PPG is widely recognized as a world leader in protective and marine coatings, developing innovative, cutting-edge products and services.
 

 
Safway Services
 
Your Access Advantage. QUIKDECK®
 
Provides safe, factory-floor-like working conditions. Can be engineered to fit almost any shape, structure or size. Modular platform easily assembled from just a few basic components. Excellent containment. Applications include vessels, offshore rigs and bridges.
 

 
Sherwin-Williams
 
Sherwin-Williams Protective & Marine Coatings
 
With 4,000 distribution points and 3,700+ years of combined experience, Sherwin-Williams delivers the products, support and expertise you need, right where you need it.
 

 
Tnemec Company, Inc.
 
Online Coating Courses from Tnemec
 
For decades, Tnemec has offered its expertise to clients presenting face-to-face coatings courses. Now, these presentations are available to anyone for CEUs at Tnemec University.
 

 
Mitsubishi Gas Chemical America
 
Performance Amine 1,3-BAC
 
A highly reactive cycloaliphatic diamine offering superior performance. Reasonable cost and curing efficacy makes it suitable for all types of epoxy resin applications.
 

 
Jotun Paints Inc.
 
Jotun Jotachar 1709
 
Mesh-free passive fire protection epoxy designed to protect against hydrocarbon pool fire scenarios for up to four hours as defined in the ANSI/UL1709 standard.
 

 
RBW Enterprises, Inc.
 
Robotic Blasting and Painting
 
When using the FasterBlaster and FasterPainter, blasting and painting can be conducted simultaneously. View the video for a full explanation of the operation.
 

 
Termarust Technologies
 
Termarust (HR CSA) Chemically Stops
Active Corrosion
 
Arch truss treated with Termarust's (HR CSA) in 2003. This steel arch bridge is rust free on all surfaces including the crevice corroded joints and connections.
 

 
 
 

Technology Publishing Co., 1501 Reedsdale Street, Suite 2008, Pittsburgh, PA 15233

TEL 1-412-431-8300  • FAX  1-412-431-5428  •  EMAIL webmaster@paintsquare.com


The Technology Publishing Network

Durability + Design PaintSquare the Journal of Protective Coatings & Linings Paint BidTracker

 
EXPLORE:      JPCL   |   PaintSquare News   |   Interact   |   Buying Guides   |   Webinars   |   Resources   |   Classifieds
REGISTER AND SUBSCRIBE:      Free PaintSquare Registration   |   Subscribe to JPCL   |   Subscribe to PaintSquare News
MORE:      About PaintSquare.com   |   Privacy policy   |   Terms & conditions   |   Site Map   |   Search   |   Contact Us