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Fourth-quarter sales for the Valspar Corp. increased by nearly 13% over 2009, lifting the company to a 12.1% sales increase for fiscal year 2010 and a promise of a strong 2011.
Net income for the fourth quarter (ended Oct. 29) of 2010 was $51.3 million, and reported earnings per share were $0.51. This compared with net income of $49.9 million for Q4 of 2009 and reported earnings per share of $0.49.
Net income for 2010 was $222.1 million, and reported earnings per share were $2.20. Net income for 2009 totaled $160.2 million, and reported earnings per share were $1.49.
“Our strong earnings performance for the year reflects solid volume growth driven by new business and outstanding operational discipline by Valspar employees,” said William L. Mansfield, Valspar chairman and chief executive officer. “During the year, we continued to invest in branding and leading-edge technologies, maintained tight control of our cost structure and strengthened our global presence.”
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| Valspar’s 2010 performance augurs well for 2011, says CEO William L. Mansfield. |
Segment Sales Growth
Fourth-quarter sales totaled $876.8 million, a 12.9% increase from the fourth quarter of 2009. Fiscal year 2010 sales totaled $3.2 billion, a 12.1% increase.
Gross profit totaled $290.5 million in the fourth quarter of 2010, up from $278 million the year before. Gross profit for the year was $1.07 billion, up from $978 million for FY2099.
Coatings sales increased to $497 million in the fourth quarter of 2010 from $435 million in the same quarter of 2009; coatings sales for FY2010 totaled $1.81 billion, compared with $1.58 billion for FY2009.
Fourth-quarter paint sales totaled $316 million, up from $283 million in 2009. Paint sales for FY2010 were $1.17 billion, up from $1.07 billion in fiscal year 2009.
Wattyl Acquisition
The fourth quarter included Valspar’s acquisition of Australian paint manufacturer Wattyl Ltd. Minneapolis-based Valspar acquired all outstanding Wattyl shares for about $142 million and assumed Wattyl’s existing debt. Wattyl had 2009 sales of $381.4 million, Valspar said.
Fourth-quarter adjusted net income per share in 2010 excluded a $0.03 per-share charge for fees related to the acquisition of Wattyl and a $0.02 per-share charge related to restructuring actions. Adjusted net income per share for 2010 excluded an $0.08 per-share charge related to restructuring actions, a $0.03 per-share charge for fees related to the acquisition of Wattyl, and an $0.08 per-share gain from the sale of assets.
2011 Outlook
Mansfield sounded an upbeat note about the next fiscal year. “Revenue growth from our new business initiatives and our Wattyl acquisition, together with pricing and productivity to offset ongoing pressure on raw material costs, position us to deliver another strong year,” he said.
“We currently anticipate fiscal 2011 adjusted net income per share in the range of $2.45 to $2.65.”
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