The Valspar Corp. ended fiscal year 2012 with a flat quarter, stronger share prices, and a modest overall sales increase for the year—overall, good enough for a solid rebound from its massive year-ending loss of a 2011.
Fiscal year 2012 sales totaled $4.02 billion for the year ending Oct. 26, a two percent increase from fiscal year 2011, the Minneapolis-based paint and coatings maker reported Tuesday (Nov. 20) in delivering its fourth-quarter and full-year results.
Adjusted net income per share increased by 24 percent to $3.28 in 2012 from $2.65 in 2011, excluding $0.18 per share in restructuring charges.
Reported net income for fiscal year 2012 was $292.5 million, or $3.10 per share.
Valspar’s extensive protective line includes coatings for oil and gas pipelines, tanks, utilities, concrete-reinforcing steel, and containers. The company dates to 1806 and took its current name in 1903.
The numbers were a marked improvement from a year ago, when the world’s sixth-largest paint and coatings company reported a net loss of $295.72 million ($3.18 per share) for the fourth quarter, compared to net income of $51.3 million ($0.51 per share) for the fourth quarter of 2010. The reported net loss for fiscal year 2011 was $138.6 million or $1.47 per share.
This year, however, has seen steady improvement. Valspar’s first quarter brought double-digit gains and a brighter full-year earnings outlook. The second quarter showed solid sales increases. Third-quarter growth was slower, but the previous gains held.
Valspar’s extensive protective line includes oil and gas pipeline coatings; tank coatings; power utility and distribution coatings; concrete-reinforcing steel coatings; container coatings; and water pipe, valve and fitting coatings.
The company also manufactures high-performance architectural coatings and consumer interior, exterior and decorative paints.
Q4: Sales Slip
Fourth-quarter sales totaled $1.02 billion, compared to $1.05 billion for the fourth quarter of 2011. Excluding currency impact, sales were flat in the quarter.
The company's 2012 performance opens the door to new growth across its business in 2013, said CEO Gary Hendickson.
Fourth-quarter adjusted net income per share was $0.86 in 2012, up two cents from 2011. However, the $0.84 of 2011 included $0.09 from a one-time non-recurring benefit from favorable tax rulings. In 2012, fourth-quarter adjusted net income per share in 2012 excludes $0.07 per share in restructuring charges.
Reported net income for the fourth quarter of 2012 was $73.8 million or $0.79 per share.
Valspar chairman and CEO Gary E. Hendrickson emphasized the company’s earnings picture and new business.
“We are pleased to deliver our fourth consecutive year of double-digit earnings growth,” Hendrickson said. “We overcame the challenge of uneven global markets by winning significant new business and through a relentless focus on productivity.
“We continued to invest in our brands and innovative technology to secure long-term growth. In addition, we returned cash to shareholders by repurchasing 5.7 million shares and increased our dividend for the 34th consecutive year.”
‘Uneven’ Times Ahead
Hendrickson laid out the company's expected pluses and minuses for 2013.
“We expect uneven global demand to continue, but we are well-positioned for growth in both our Coatings and Paints segments,” he said. “We have a strong new product pipeline to help gain new market share.
“Additionally, our productivity initiatives and operating discipline will support further margin expansion. We estimate fiscal 2013 net income per share to be in the range of $3.65 to $3.85, delivering another year of double-digit earnings growth.”
This was Valspar’s last earnings report under the leadership of CFO Lori A. Walker, who has announced her retirement.