Valspar Seals a Record Year


The Valspar Corp. closed out fiscal year 2014 with double-digit sales and earnings increases that set full-year records for the world's sixth-largest paint and coatings company.

The Minneapolis-based company reported a 10 percent increase in net sales for fiscal 2014, topping out at a record $4.5 billion. Full-year diluted Earnings Per Share (as adjusted) increased by 23 percent to a record $4.35, the company reported Tuesday (Nov. 25).

“We are pleased to report record sales and earnings in 2014,” said Gary E. Hendrickson, chairman and chief executive officer.

"This strong performance was driven by volume growth in the Coatings segment; continuing benefits from our new growth initiatives in Paints; excellent performance from our international regions; benefits from new product introductions; and the positive impact of productivity initiatives."

Fourth-Quarter Highlights

Net sales in the Coatings segment increased by 15 percent to $694 million in the fourth quarter, led by growth in Packaging, General Industrial (excluding acquisitions) and Coil. Excluding acquisitions, sales in the segment increased 11 percent, and volumes increased in the high single digits. All product lines delivered volume increases.

The segment's adjusted earnings before interest and taxes (EBIT) totaled $117 million, a 25 percent increase built on acquisitions, increased volume, improved sales mix and productivity initiatives, the company said.

Net sales in the Paints segment increased 7 percent to $479 million in the fourth quarter of 2014, including a volume increase in the high single digits. Sales grew in all regions, driving a 41 percent increase in adjusted EBIT to $70 million.


Fourth-quarter sales grew 15 percent across the Coatings segment. Growth should slow in 2015.

Overall sales grew 11 percent, volumes increased nine percent, and adjusted EPS increased 42 percent for the fiscal fourth quarter, Hendrickson said.

The Coatings segment saw the highest growth in the General Industrial product line, aided by the Inver acquisition and growth in the Packaging product line, especially from non-BPA offerings.

What's Ahead

The company forecast another year of growth, although more muted, in 2015.

Sales growth is anticipated in the low single digits in FY 2015, with earnings in the range of $4.45 to $4.65.

Three items are expected to dampen both sales and share price, Valspar said:

  • Foreign currency translation;
  • Increased interest expense from anticipated debt issuance; and
  • The lack of a 53rd week in fiscal 2015, as happened in FY 2014.

The combined impact of these three factors is expected to reduce sales growth by about four percentage points and reduce EPS (as adjusted) by approximately $0.24 in fiscal 2015.

Valspar will host its Analyst Day for analysts and investors Dec. 3. The webcast of its full-year and fourth-quarter earnings conference call is available here.


Tagged categories: Architectural coatings; Business operations; Coatings Technology; Coil Coatings; Earnings reports; North America; Paint and Coating Sales; Protective Coatings; Valspar

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