Exhibit 99.1
FOR IMMEDIATE RELEASE
May 17, 2004
VALSPAR ANNOUNCES SECOND QUARTER EARNINGS
MINNEAPOLIS, MINNESOTA – The Valspar Corporation (NYSE-VAL), a leading paint and coatings manufacturer, today reported net income for the second quarter ended April 30, 2004 of $39,089,000, up 21.6% from net income of $32,157,000 for the comparable period last year. Diluted earnings were $0.74 per share, versus $0.62 reported a year ago. Sales for the quarter increased 13.6% to $638,387,000, compared to $561,770,000 last year.
Net income for the first six months of fiscal 2004 was $57,475,000 or $1.09 per diluted share, compared with $47,776,000 or $0.92 per diluted share for the same period a year ago. Sales for the first half increased 10.6% to $1,139,978,000 compared to $1,030,741,000 during the comparable period a year ago.
Commenting on the second quarter, Richard M. Rompala, Chairman and Chief Executive Officer, said, “Second quarter results benefited from the recovery in the U.S. industrial economy, continuing strength in our architectural coatings product line and the impact of strong foreign currencies. We are pleased with our first half growth and expect good sales momentum for the balance of the year.
With an improved economy and high oil prices, we are seeing significant increases in our raw material costs. We are taking aggressive measures to offset these cost pressures with cost reduction initiatives, productivity improvements and pricing actions where appropriate in the marketplace.”
For further information, contact Deborah D. Weiss, Vice President and Treasurer of Valspar at 612-375-7302.
Note: Valspar will host a conference call on Monday, May 17th at 10:00 AM CDT. The call can be heard live over the Internet at Valspar’s website athttp://www.valspar.com under Investor Relations. Those unable to participate during the live broadcast can access an archive of the call on the Valspar website. A taped replay of the call can also be accessed by dialing 1-800-475-6701 in the U.S. or 320-365-3844 outside the U.S. beginning at 1:30 PM, using access code 731212.
This press release contains certain “forward-looking” statements. These forward-looking statements are based on management’s expectations and beliefs concerning future events. Forward-looking statements are necessarily subject to risks, uncertainties and other factors, many of which are outside the control of the Company that could cause actual results to differ materially from such statements. These uncertainties and other factors include dependence of internal earnings growth on economic conditions and growth in the domestic and international coatings industry; risks related to any future significant acquisitions, including risks of adverse changes in the results of acquired businesses, risks of disruptions in business resulting from the integration process and higher interest costs resulting from further borrowing for any such acquisitions; our reliance on the efforts of vendors, government agencies, utilities and other third parties to achieve adequate compliance and avoid disruption of our business; changes in the Company’s relationships with customers and suppliers; unusual weather conditions that might adversely affect sales; changes in raw materials pricing and availability; changes in governmental regulation, including more stringent environmental, health and safety regulations; the nature, cost and outcome of pending and future litigation and other legal proceedings; the outbreak of war and other significant national and international events; and other risks and uncertainties. The foregoing list is not exhaustive, and the Company disclaims any obligations to subsequently revise any forward-looking statements to reflect events or circumstances after the date of such statements.
THE VALSPAR CORPORATION
COMPARATIVE CONSOLIDATED EARNINGS
For the Quarters Ended April 30, 2004 and April 25, 2003
| Second Quarter | Year-To-Date |
|---|
| (Dollars in thousands, except per share amounts) | (Unaudited) | | (Unaudited) | | (Unaudited) | | (Unaudited) |
|---|
| |
| 2004 | | 2003 | | 2004 | | 2003 |
|---|
| |
| Net Sales | | | $ | 638,387 | | $ | 561,770 | | $ | 1,139,978 | | $ | 1,030,741 | |
| Cost of Sales | | | | 432,420 | | | 383,854 | | | 777,659 | | | 709,176 | |
| Operating Expenses | | | | 132,112 | | | 114,266 | | | 248,212 | | | 220,767 | |
| |
| Income From Operations | | | | 73,855 | | | 63,650 | | | 114,107 | | | 100,798 | |
| Interest Expense | | | | 10,590 | | | 11,508 | | | 20,980 | | | 23,325 | |
| Other Expense, Net | | | | 218 | | | 275 | | | 425 | | | 416 | |
| |
| Income Before Income Taxes | | | | 63,047 | | | 51,867 | | | 92,702 | | | 77,057 | |
| Income Taxes | | | | 23,958 | | | 19,710 | | | 35,227 | | | 29,281 | |
| |
| Net Income | | | $ | 39,089 | | $ | 32,157 | | $ | 57,475 | | $ | 47,776 | |
| |
| Net Income per Common Share-basic | | | $ | 0.76 | | $ | 0.64 | | $ | 1.13 | | $ | 0.95 | |
| Net Income per Common Share-diluted | | | $ | 0.74 | | $ | 0.62 | | $ | 1.09 | | $ | 0.92 | |
| |
| Average Number of Shares O/S-basic | | | | 51,233,114 | | | 50,386,741 | | | 51,053,938 | | | 50,297,951 | |
| Average Number of Shares O/S-diluted | | | | 52,882,688 | | | 51,618,420 | | | 52,749,529 | | | 51,730,317 | |
| |
| |
THE VALSPAR CORPORATION
CONSOLIDATED BALANCE SHEETS |
| |
| (Dollars in thousands) | April 30,
2004 | | October 31,
2003 | | April 25,
2003 | | |
| |
| Assets | (Unaudited) | | | | (Unaudited) | | |
| Current Assets: | | |
| Cash and Cash Equivalents | | | $ | 41,560 | | $ | 41,589 | | $ | 20,417 | |
| Accounts Receivable, Net | | | | 445,175 | | | 385,178 | | | 400,141 | |
| Inventories | | | | 216,377 | | | 192,251 | | | 216,037 | |
| Other | | | | 108,088 | | | 119,813 | | | 99,379 | |
| |
| Total Current Assets | | | | 811,200 | | | 738,831 | | | 735,974 | |
| Goodwill, Net | | | | 1,004,177 | | | 961,915 | | | 950,991 | |
| Other Assets, Net | | | | 393,735 | | | 381,559 | | | 381,292 | |
| Property, Plant & Equipment, Net | | | | 422,038 | | | 414,219 | | | 405,259 | |
| |
| Total Assets | | | $ | 2,631,150 | | $ | 2,496,524 | | $ | 2,473,516 | |
| |
| |
| Liabilities and Stockholders' Equity | | |
| Current Liabilities: | | |
| Notes Payable to Banks | | | $ | 108,985 | | $ | 26,727 | | $ | 49,095 | |
| Trade Accounts Payable | | | | 234,810 | | | 202,713 | | | 190,160 | |
| Income Taxes | | | | 51,560 | | | 48,458 | | | 43,840 | |
| Accrued Liabilities | | | | 230,980 | | | 253,165 | | | 220,562 | |
| |
| Total Current Liabilities | | | | 626,335 | | | 531,063 | | | 503,657 | |
| Long Term Debt | | | | 710,689 | | | 749,199 | | | 873,043 | |
| Deferred Liabilities | | | | 355,435 | | | 346,945 | | | 301,409 | |
| Stockholders' Equity | | | | 938,691 | | | 869,317 | | | 795,407 | |
| |
| Total Liabilities and Stockholders' Equity | | | $ | 2,631,150 | | $ | 2,496,524 | | $ | 2,473,516 | |
| |
