Valspar's sales increase 10.7% in third quarter
By Furniture Today Staff -- Furniture Today, October 19, 2005
Minneapolis — Despite plans to shutter seven manufacturing facilities, coatings supplier Valspar recorded a 10.7% sales increase in its third quarter ended July 29, paired with a 1.8% increase in net income.
Sales in the latest quarter were $725.5 million, up from $655.6 million in the comparable 2004 quarter. Net profits were $45.7 million, or 88 cents per share, compared with $44.9 million or 85 cents per share in the year-earlier period.
The latest quarter included a $2 million after-tax charge for the closure of the seven plants. Last year's quarter included an after-tax charge of $1.2 million for the closure of one manufacturing facility.
In the nine months, Valspar posted sales of $2 billion, also up 10.7% over year-ago sales of $1.8 billion. Net income was $96.7 million, off 5.6% from the $102.4 million reported in the comparable 2004 nine months.
President and CEO William Mansfield said, "While the reduction of retail inventory levels and continued raw material cost pressures constrained the performance of our paints segment, our coatings segment made significant progress in restoring operating margins due to continued sales strength, pricing actions and tight expense control.
"We expect that raw material costs will remain a challenge for the balance of the year. Nevertheless, we anticipate continued improvement in our year-over-year results in the fourth quarter."
Mansfield said the third-quarter charge to close seven plants is part of a broad-based strategy to reduce the company's manufacturing capacity and better utilize its remaining plants.
"Our plans call for reducing our manufacturing capacity worldwide by approximately 10% in order to focus our capital investments on best facilities, increase efficiency and improve our ability to service and support our customers," he said.
"We are confident this initiative will strengthen Valspar's financial performance and position us for significant growth."
| Valspar | |||
|---|---|---|---|
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| Quarter ended 7/29 | 2005 | 2004 | Change |
| (a) Includes a $2 million after-tax charge associated with the closing of seven manufacturing facilities. (b) Includes a $1.2 million after-tax charge for the closure of one manufacturing facility. | |||
| Sales | $725,477,000 | $655,598,000 | 10.7% |
| Operating income | 85,418,000 | 84,704,000 | 0.8% |
| Net income | (a)45,713,000 | (b)44,913,000 | 1.8% |
| Earnings per share | 0.88 | 0.85 | 3.5% |
| 9 months ended 7/29 | 2005 | 2004 | Change |
| Sales | $1,988,563,000 | $1,795,576,000 | 10.7% |
| Operating income | 184,504,000 | 198,811,000 | (7.2%) |
| Net income | (a)96,652,000 | (b)102,389,000 | (5.6%) |
| Earnings per share | 1.85 | 1.94 | (4.6%) |
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Valspar’s sales increase 10.7% in 3Q
Oct 20, 2005
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