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Valspar Paints Deliver Q2 Gains

Tuesday, May 20, 2014

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Valspar Corp. saw soaring sales and income in its second quarter, driven by booming volume growth in its consumer paints segment.

Second-quarter sales reached $1.1 billion, a 10 percent jump from the prior year’s second quarter, the company reported Monday (May 19).

Images: Valspar

Net sales in the company's Paints segment increased 8 percent to $472 million in the second quarter of 2014.

Adjusted net income for the second quarter of 2014 was $93 million, up from $83 million in the prior-year period. Earnings per diluted share, excluding nonrecurring items, totaled $1.07, an increase from $0.91 reported in Q2 of 2013, the Minneapolis-based paint maker said.

Growth Plans 'Successful'

“We are pleased to report another strong quarter of volume and sales growth from both our Coatings and Paints segments,” said Gary E. Hendrickson, chairman and CEO.

“We are successfully executing our growth plans by integrating acquisitions, scaling new business wins, and improving productivity. These efforts are evident in our results, as sales for the first half of the fiscal year increased 9 percent and adjusted diluted EPS is up 17 percent.”

Gary Hendrickson

Gary E. Hendrickson, chairman and CEO of Valspar, was recently elected vice chairman and treasurer of the American Coatings Association.

The company reaffirmed its full year diluted EPS (as adjusted) guidance of $3.95 to $4.15.

Hendrickson said the company would remain focused in order to “achieve our full year sales and earnings growth objectives.”

Segment Sales Reported

Net sales in the Paints segment increased 8 percent to $472 million in the second quarter of 2014.

Volume increased in all geographic regions, including the U.S., China and Australia, Valspar reported. In the U.S., volume increased more than 10 percent.

The company’s paints segment includes consumer brands Valspar, Medallion, Duramax, Cabot Stains and PlastiKote. Its high-performance architectural coatings consist of an extrusion coating line and coil surface coatings.

Net sales in the company’s Coatings segment increased 12 percent to reach $603 million in the second quarter of 2014.

Excluding acquisitions, volumes in the segment increased 4 percent, Valspar reported.

Volume growth was led by another quarter of increases in Packaging coatings and Wood coatings, according to the company.

Volumes in the General Industrial and Coil coatings declined mid-single digits in the second quarter due to uneven end-market demand and supply-chain disruptions caused by inclement weather conditions in the U.S., Valspar said.


Sales in Valspar's coatings segment increased 12 percent over the second quarter of FY 2013.

Valspar's protective line includes coatings for oil and gas pipeline, tanks, utilities, containers, and concrete-reinforcing steel.

Sales in the Other category—which includes specialty polymers, colorants and furniture protection—decreased slightly to $55.7 million in the second quarter of 2014, from $56.6 million in the year-ago period.

Mixed Earnings

Paints segment adjusted Earnings Before Interest and Taxes (EBIT) of $57 million was down from $59 million reported for the prior year.

Valspar said the drop was due to planned increases in advertising and marketing investments to support new retail programs in both the home improvement and independent hardware channels, and higher incentive compensation expense.

On the other hand, the Coatings segment saw a 21 percent jump in adjusted EBIT, to reach $101 million, as a result of acquisitions, increased volume, improved sales mix and productivity initiatives.

Valspar’s reported net income and earnings includes nonrecurring items detailed in the “Reconciliation of Non-GAAP Financial Measures” section of its balance sheet.


Tagged categories: Business conditions; Business matters; Coatings manufacturers; Coatings Technology; Earnings reports; Finance; Painters; Valspar

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