Valspar posts 9.6% sales increase in third qtr.
By Furniture Today Staff -- Furniture Today, August 22, 2004
Minneapolis — Coatings supplier Valspar posted sales of $655.6 million in its third quarter, an increase of 9.6% over sales of $598.2 million in the comparable 2003 quarter.
Net income in the quarter ended July 30 was $44.9 million, up 12% from last year's $40.1 million. The current quarter included a charge of two cents per share for the closure and sale of a manufacturing facility.
For the first nine months, Valspar sales increased 10.2% to $1.8 billion from $1.6 billion a year ago. Earnings jumped 16.5% to $102.4 million from $87.9 million last year.
Valspar's profit margin, defined as net income divided by sales, inched up in the quarter to 6.9%, compared with 6.7% a year ago. The company's profit margin for the nine months was 5.7%, up from 5.4% in the same period a year ago.
Quarterly operating margin for Valspar was 12.9%, the same as last year, while the operating margin for the nine months increased to 11.1% from 10.1% a year ago.
Valspar Chairman and CEO Richard Rompala said, "Core sales growth was strong across all our product lines, particularly industrial and architectural coatings. We have initiated pricing action in all of our businesses, but raw material cost pressures have intensified.
"While we continue to implement cost-reduction measures and productivity improvements, the acceleration in raw material costs has outpaced our pricing actions. As a consequence, we expect this year's fourth-quarter earnings to be flat to up slightly compared with last year's fourth-quarter earnings of 76 cents per share, which excludes last year's fourth-quarter charge of 29 cents per share."
On Aug. 4, Valspar acquired the forest products business of Associated Chemists. It said the company's $28 million wood products line was a "great fit" with Valspar's existing building products business.
| Quarter ended 7/30 | 2004 | 2003 | Change |
|---|---|---|---|
| Sales | $655,598,000 | $598,179,000 | 9.6% |
| Operating income | 84,704,000 | 77,017,000 | 10.0% |
| Net income | 44,913,000 | 40,114,000 | 12.0% |
| Earnings per share | 0.85 | 0.77 | 10.4% |
| 9 months ended 7/30 | 2004 | 2003 | Change |
| Sales | $1,795,576,000 | $1,628,920,000 | 10.2% |
| Operating income | 198,811,000 | 177,815,000 | 11.8% |
| Net income | 102,389,000 | 87,889,000 | 16.5% |
| Earnings per share | 1.94 | 1.70 | 14.1% |
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