Coatings Industry News

Main News Page


Coil, Wood Coatings Bolster Valspar’s Q2

Wednesday, May 25, 2016

Comment | More

Net sales and total volumes dropped slightly in the second quarter for Minneapolis-based Valspar, as the company prepares for a proposed acquisition by The Sherwin-Williams Company. But the company’s coatings segment reported an increase in volume, bolstered by growth in its coil, wood and packaging lines.

Overview

According to Valspar’s second-quarter earnings report, issued Tuesday (May 24), net sales for the company as a whole were down 2 percent from prior-year numbers, at $1.06 billion.

Adjusted Earnings Before Interest and Tax (EBIT) were up about 2 percent, however. Adjusted earnings per share also increased about 10 percent, to $1.22.

Paints Division

Valspar’s paints segment saw a 6 percent decrease in sales volume, though net sales increased about 1 percent, to $407 million. (That includes a 2 percent negative impact from the effects of foreign currency translation, the company says.)

Detroit Public Safety building
Photos: Valspar

On the coatings side of Valspar’s business, the company reports a 2 percent growth in volume, which it attributes to growth in its coil, wood and packaging product lines.

Paints overall saw declining sales in North America, Asia and Australia, though the North American numbers were offset by volume growth from last year’s acquisition of Quest Specialty Coatings. While North American sales and volume both reported single-digit growth for the quarter, Valspar says volume growth from the acquisition (which involves the auto refinish line) was buffeted by lower sales by volume in the home improvement channel.

Overall, acquisitions contributed 6 percent growth to the volume numbers, and 11 percent to total sales.

The paints segment reported an adjusts EBIT of $52 million, an increase of 12 percent, which Valspar attributes largely to the effect of the Quest acquisition. The company also cites “benefits from productivity initiatives and cost/price.”

Coatings Division

On the coatings side of Valspar’s business, the company reports a 2 percent growth in volume, which it attributes to growth in its coil, wood and packaging product lines.

The coil and wood lines reported double-digit volume increases and single-digit sales increases; packaging saw volume growth in the low single digits with sales remaining flat.

The general industrial line saw a double-digit decrease in both volume and sales, according to the report.

Net sales for coatings decreased by 4 percent, though, to $587 million, including a 4 percent drop attributable to foreign currency translation.

Gary Hendrickson

"The previously announced combination of Sherwin-Williams and Valspar will create significant value for our customers, employees and other stakeholders," said Valspar CEO Gary Hendrickson.

“Our results in the second quarter were highlighted by new business wins, growth in adjusted EBIT in both Paints and Coatings and 10 percent growth in adjusted EPS," said Valspar Chairman and CEO Gary E. Hendrickson.

Upcoming Acquisition

Valspar is preparing for a proposed deal, announced in March, that would have Sherwin-Williams (Cleveland) acquiring the company for more than $11 billion. Should the deal go through, Sherwin-Williams would pay $113 per share to purchase the company.

“The previously announced combination of Sherwin-Williams and Valspar will create significant value for our customers, employees and other stakeholders," Hendrickson said. "We are confident this transaction will accelerate many of the operating initiatives already underway at Valspar. We look forward to positioning Valspar to enter its next phase of growth and to continue to work closely with Sherwin-Williams to obtain the necessary approvals to seamlessly close this transaction."

Citing the proposed acquisition, Valspar announced that it would be suspending financial and earnings guidance for fiscal year 2016, and would not be holding a conference call to discuss quarterly earnings. The company notes that its investor relations team is available to answer questions.

Valspar, the fifth-largest coatings manufacturer in North America, employs more than 11,000 people in more than 25 countries. Its product lines include paints and stains, packaging coatings, auto refinish, OEC coatings, and coil and extrusion coatings.

   

Tagged categories: Asia Pacific; Coatings manufacturers; Earnings reports; EMEA (Europe, Middle East and Africa); Finance; Gary Hendrickson; Good Technical Practice; Latin America; North America; Sherwin-Williams; Valspar

Comment Join the Conversation:

Sign in to our community to add your comments.


Advertisements
 
KTA-Tator, Inc. - Corporate Office

 
Fischer Technology Inc.

 
ABKaelin, LLC

 
Tarps manufacturing, Inc.

 
Induron Coatings, Inc.

 
Mitsubishi Gas Chemical America

 
RCG America

 
HoldTight Solutions Inc.

 
SABRE Autonomous Solutions

 
Sauereisen, Inc.

 
 
 

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

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   |   Support   |   Site Map   |   Search   |   Contact Us