Valspar Reports Fiscal 2012 Fourth Quarter and Full Year Results
Delivers Fiscal Year 2012 Adjusted Net Income per Share of $3.28, a 24 Percent Increase from Fiscal 2011
Issues Fiscal 2013 Guidance of Net Income per Share in the Range of $3.65 - $3.85
MINNEAPOLIS--(BUSINESS WIRE)-- The Valspar Corporation (NYS: VAL) today reported its results for the fourth quarter and fiscal year ended October 26, 2012. Fiscal year 2012 sales totaled $4.02 billion, a two percent increase from fiscal year 2011. Adjusted net income per share increased 24 percent to $3.28 in 2012 from $2.65 in 2011. Fiscal year 2012 adjusted net income per share excludes $0.18 per share in restructuring charges. Adjusted net income per share for 2011 excludes a $3.75 per share non-cash impairment charge for goodwill and intangibles, a $0.24 per share restructuring charge and $0.09 per share in acquisition-related charges. Reported net income for fiscal year 2012 was $292.5 million or $3.10 per share. The reported net loss for fiscal year 2011 was $138.6 million or $1.47 per share.
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. Fourth-quarter adjusted net income per share was $0.86 in 2012 compared to $0.84 in 2011. Last year's net income per share included a one-time non-recurring benefit from favorable tax rulings that contributed $0.09. 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.
Fourth-quarter adjusted net income per share in 2011 excludes a $3.82 per share non-cash impairment charge for goodwill and intangibles and a $0.13 per share restructuring charge. Including the after-tax non-cash impairment charge of $363.4 million in 2011, the reported net loss for the fourth quarter of 2011 was $295.7 million or $3.18 per share.
"We are pleased to deliver our fourth consecutive year of double-digit earnings growth," said Gary E. Hendrickson, chairman and chief executive officer. "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."
Commenting on the outlook for 2013, Hendrickson noted: "We expect uneven global demand to continue, but we are well-positioned for growth in both our Coatings and Paints segments. 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."
Hendrickson and Lori A. Walker, senior vice president and chief financial officer, will conduct a conference call for investors at 10:00 a.m. Central Time (11:00 a.m. Eastern Time) today. The call can be heard live over the Internet by visiting the Investor Relations section of Valspar's website at www.valsparcorporate.com. Those unable to participate during the live broadcast can access an archive of the call on the Valspar website. A taped delay of the call will also be available from 12:30 p.m. Central Time, Tuesday Nov. 20th through midnight Tuesday, Dec. 4th by dialing +1 800-475-6701 from within the U.S. or +1 (320) 365-3844 from outside of the U.S., using access code 270542.
About The Valspar Corporation
The Valspar Corporation (NYS: VAL) is a global leader in the paint and coatings industry. Since 1806, Valspar has been dedicated to bringing customers the latest innovations, the finest quality and the best customer service in the coatings industry.
Certain statements contained in "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in this report constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. Forward-looking statements are based on management's current expectations, estimates, assumptions and beliefs about future events, conditions and financial performance. Forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside our control and could cause actual results to differ materially from such statements. Any statement that is not historical in nature is a forward-looking statement. We may identify forward-looking statements with words and phrases such as "expects," "projects," "estimates," "anticipates," "believes," "could," "may," "will," "plans to," "intend," "should" and similar expressions.These risks, uncertainties and other factors include, but are not limited to, deterioration in general economic conditions, both domestic and international, that may adversely affect our business; fluctuations in availability and prices of raw materials, including raw material shortages and other supply chain disruptions, and the inability to pass along or delays in passing along raw material cost increases to our customers; dependence of internal sales and earnings growth on business cycles affecting our customers and growth in the domestic and international coatings industry; market share loss to, and pricing or margin pressure from, larger competitors with greater financial resources; significant indebtedness that restricts the use of cash flow from operations for acquisitions and other investments; dependence on acquisitions for growth, and risks related to future acquisitions, including adverse changes in the results of acquired businesses, the assumption of unforeseen liabilities and disruptions resulting from the integration of acquisitions; risks and uncertainties associated with operations and achievement of profitable growth in developing markets, including Asia and Central and South America; loss of business with key customers; damage to our reputation and business resulting from product claims or recalls, litigation, customer perception and other matters; our ability to respond to technology changes and to protect our technology; changes in governmental regulation, including more stringent environmental, health and safety regulations; our reliance on the efforts of vendors, government agencies, utilities and other third parties to achieve adequate compliance and avoid disruption of our business; unusual weather conditions adversely affecting sales; changes in accounting policies and standards and taxation requirements such as new tax laws or revised tax law interpretations; the nature, cost and outcome of pending and future litigation and other legal proceedings; and civil unrest and the outbreak of war and other significant national and international events. We undertake no obligation to subsequently revise any forward-looking statement to reflect new information, events or circumstances after the date of such statement, except as required by law.
THE VALSPAR CORPORATION
COMPARATIVE CONSOLIDATED EARNINGS
For the Quarters Ended October 26, 2012 and October 28, 2011
(Dollars in thousands, except per share amounts)
Cost of Sales
Research and Development
Selling, General and Administrative
Impairment of Goodwill and Intangible Assets
Income (Loss) From Operations
Other (Income) Expense, Net
Income (Loss) Before Income Taxes
Net Income (Loss)
Average Number of Shares O/S - basic
Average Number of Shares O/S - diluted
Net Income (Loss) per Common Share - basic
Net Income (Loss) per Common Share - diluted
NOTE: The Statement of Operations for the year ended October 28, 2011 was derived from the audited consolidated financial statements at that date.
NON-GAAP FINANCIAL MEASURES
In the accompanying press release, we have reported non-GAAP financial measures - "Adjusted net income per common share - diluted". We disclose this measure because we believe the measure may assist investors in comparing our results of operations in the respective periods without regard to the effect on results of (i) restructuring charges, (ii) the non-cash impairment charge on goodwill and intangible assets and (iii) acquisition-related charges.
The following is a reconciliation of "Net income per common share - diluted" to "Adjusted net income per common share - diluted" for the periods presented:
Net Income (Loss) per Common Share - diluted
Impact of Dilutive Shares *
Non-cash Impairment Charge on Goodwill and Intangible Assets
Adjusted Net Income per Common Share - diluted
* In the non-GAAP reconciliation of adjusted net income per common share, we used 95,163,840 and 97,054,164 diluted shares for the 2011 quarter
and year-to-date periods, respectively, to reflect positive net income on an adjusted basis and the related share dilution.
Cash and Cash Equivalents
Accounts and Notes Receivable, Net
Deferred Income Taxes
Prepaid Expenses and Other
Total Current Assets
Long Term Deferred Income Taxes
Property, Plant & Equipment, Net
Liabilities and Stockholders' Equity
Current Portion of Long-Term Debt
Trade Accounts Payable
Other Accrued Liabilities
Total Current Liabilities
Long Term Debt, Net of Current Portion
Deferred Income Taxes
Other Long Term Liabilities
Total Liabilities and Stockholders' Equity
NOTE: The Balance Sheet at October 28, 2011 was derived from the audited consolidated financial statements at that date.