Exhibit 99.1
| FOR IMMEDIATE RELEASE | February 14, 2005 |
VALSPAR REPORTS FIRST QUARTER EARNINGS
MINNEAPOLIS, MINNESOTA – The Valspar Corporation (NYSE-VAL), a leading coatings manufacturer, reported today net income for the first quarter ended January 28, 2005 of $11,698,000 versus net income of $18,386,000 for the comparable period last year. Diluted earnings were $0.22 per share, consistent with revised expectations announced February 2ndand down from $0.35 per share reported a year ago. Sales for the quarter increased 11.1% to $557,144,000, compared to $501,591,000 last year.
Commenting on the first quarter, Richard M. Rompala, Chairman and Chief Executive Officer, said, “First quarter results reflect continuing sales strength in all our businesses and the impact of significantly higher raw material costs on our profit margins. While we expect these trends to continue in the second quarter, we also anticipate that additional pricing actions will begin to restore our margins to acceptable levels.”
For further information, contact Lori A. Walker, Vice President, Controller and Treasurer of Valspar at 612-375-7350.
Note: Valspar will host a conference call on Monday, February 14th at 10:00 AM CST. 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 769885.
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.
COMPARATIVE CONSOLIDATED EARNINGS
For the Quarters Ended January 28, 2005 and January 30, 2004
| (Dollars in thousands, except per share amounts) | First Quarter
(Unaudited) | | First Quarter
(Unaudited) |
|
| 2005 | | 2004 |
|---|
|
| Net Sales | | | $ | 557,144 | | $ | 501,591 | |
| Cost of Sales | | | | 404,334 | | | 345,239 | |
| Operating Expenses | | | | 122,115 | | | 116,100 | |
|
| Income From Operations | | | | 30,695 | | | 40,252 | |
| Interest Expense | | | | 10,532 | | | 10,390 | |
| Other Expense/(Income), Net | | | | 1,594 | | | 207 | |
|
| Income Before Income Taxes | | | | 18,569 | | | 29,655 | |
| Income Taxes | | | | 6,871 | | | 11,269 | |
|
| Net Income | | | $ | 11,698 | | $ | 18,386 | |
|
| Net Income per Common Share-basic | | | $ | 0.23 | | $ | 0.36 | |
| Net Income per Common Share-diluted | | | $ | 0.22 | | $ | 0.35 | |
|
| Average Number of Shares O/S-basic | | | | 51,440,090 | | | 50,874,763 | |
| Average Number of Shares O/S-diluted | | | | 52,632,435 | | | 52,602,010 | |
|
THE VALSPAR CORPORATION
CONSOLIDATED BALANCE SHEETS
| (Dollars in thousands) | January 28,
2005 | | October 29,
2004 | | January 30,
2004 |
|
| Assets | (Unaudited) | | | (Unaudited) |
|---|
| Current Assets: | | | | | | | | | | | |
| Cash and Cash Equivalents | | | $ | 46,018 | | $ | 54,143 | | $ | 38,854 | |
| Accounts Receivable, Net | | | | 425,810 | | | 411,635 | | | 390,852 | |
| Inventories | | | | 248,106 | | | 210,554 | | | 208,078 | |
| Other | | | | 127,049 | | | 125,983 | | | 112,686 | |
|
| Total Current Assets | | | | 846,983 | | | 802,315 | | | 750,470 | |
| Goodwill, Net | | | | 1,009,870 | | | 996,562 | | | 1,004,445 | |
| Other Assets, Net | | | | 404,514 | | | 406,950 | | | 387,173 | |
| Property, Plant & Equipment, Net | | | | 433,834 | | | 428,431 | | | 422,172 | |
|
| Total Assets | | | $ | 2,695,201 | | $ | 2,634,258 | | $ | 2,564,260 | |
|
| Liabilities and Stockholders’ Equity | | |
| Current Liabilities: | | |
| Notes Payable to Banks | | | $ | 320,810 | | $ | 168,208 | | $ | 76,400 | |
| Trade Accounts Payable | | | | 241,131 | | | 234,446 | | | 188,648 | |
| Income Taxes | | | | 41,700 | | | 45,254 | | | 48,000 | |
| Accrued Liabilities | | | | 220,350 | | | 270,303 | | | 211,162 | |
|
| Total Current Liabilities | | | | 823,991 | | | 718,211 | | | 524,210 | |
| Long Term Debt | | | | 465,246 | | | 549,073 | | | 790,885 | |
| Deferred Liabilities | | | | 369,208 | | | 366,611 | | | 352,175 | |
| Stockholders’ Equity | | | | 1,036,756 | | | 1,000,363 | | | 896,990 | |
|
| Total Liabilities and Stockholders’ Equity | | | $ | 2,695,201 | | $ | 2,634,258 | | $ | 2,564,260 | |
|
