Valspar 8-K Results of Operations and Financial Condition

Exhibit 99.1

FOR IMMEDIATE RELEASE AUGUST 15, 2005

VALSPAR ANNOUNCES THIRD QUARTER RESULTS,
PLANS TO RATIONALIZE MANUFACTURING CAPACITY

MINNEAPOLIS, MINNESOTA – The Valspar Corporation (NYSE–VAL), a leading paint and coatings manufacturer, today reported net income for the third quarter ended July 29, 2005 of $45,713,000 or $0.88 per diluted share versus net income of $44,913,000 or $0.85 per diluted share for the comparable period last year.  This year’s third quarter results include after tax charges of $2.0 million or $0.04 per share associated with the planned closure of 7 manufacturing facilities.  Last year’s results for the comparable period include an after tax charge of $1.2 million or $0.02 per share for the closure of one manufacturing facility.  Sales for the quarter increased 10.7% to $725,477,000 compared to $655,598,000 last year.

Net income for the first nine months of fiscal 2005 was $96,652,000 or $1.85 per diluted share, compared with $102,389,000 or $1.94 per diluted share for the same period a year ago.  Sales for the first nine months increased 10.7% to $1,988,563,000 compared to $1,795,576,000 during the comparable period a year ago.

Commenting on third quarter results and the outlook for the year, William L. Mansfield, President and Chief Executive Officer, 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.”

“The third quarter charge associated with closing 7 facilities is the first phase of a broad-based strategy to reduce our manufacturing capacity and enable us to better utilize our remaining plants.  Our plans call for reducing our manufacturing capacity worldwide by approximately 10% in order to focus our capital investments on our best facilities, increase efficiency and improve our ability to service and support our customers.  This manufacturing rationalization is expected to be completed by the end of 2006.  We expect the costs of this initiative will include additional net charges to earnings of $0.20 to $0.25 per share in 2006, generating annual savings of $0.20 to $0.25 per share starting in 2007.  We’re continuing to finalize the details of our plan and will provide periodic updates on our progress.  We are confident this initiative will strengthen Valspar’s financial performance and position us for significant growth.”

Note: Valspar will host a conference call on Monday, August 15^th 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 792084.

For further information, contact Lori A. Walker, Vice President, Controller and Treasurer at Valspar / 612-375-7350.

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, but are not limited to, dependence of internal earnings growth on economic conditions and growth in the domestic and international coatings industry; risks related to any future acquisitions, including risks of adverse changes in the results of acquired businesses and the assumption of unforeseen liabilities; 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; risks of disruptions in business resulting from the Company’s relationships with customers and suppliers; unusual weather conditions adversely affecting sales; changes in raw materials pricing and availability; delays in passing along cost increases to customers; 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 July 29, 2005 and July 30, 2004

	Third Quarter				Year-To-Date
(Dollars in thousands, except per share amounts)	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
	2005		2004		2005		2004
Net Sales	$	725,477	$	655,598	$	1,988,563	$	1,795,576
Cost of Sales		505,889		446,925		1,408,036		1,224,584
Operating Expenses		134,170		123,969		396,023		372,181
Income From Operations		85,418		84,704		184,504		198,811
Interest Expense		11,535		10,264		32,995		31,244
Other Expense, Net		2,070		1,999		1,714		2,424
Income Before Income Taxes		71,813		72,441		149,795		165,143
Income Taxes		26,100		27,528		53,143		62,754
Net Income	$	45,713	$	44,913	$	96,652	$	102,389
Net Income per Common Share-basic	$	0.90	$	0.87	$	1.89	$	2.00
Net Income per Common Share-diluted	$	0.88	$	0.85	$	1.85	$	1.94
Average Number of Shares O/S-basic		50,878,401		51,329,237		51,121,280		51,145,705
Average Number of Shares O/S-diluted		52,026,152		52,697,725		52,307,694		52,723,204

THE VALSPAR CORPORATION
CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)	July 29, 2005		October 29, 2004		July 30, 2004
Assets	(Unaudited)				(Unaudited)
Current Assets:
Cash and Cash Equivalents	$	53,392	$	54,143	$	49,105
Accounts Receivable, Net		472,549		411,635		436,198
Inventories		251,191		210,554		213,047
Other		119,179		125,983		117,659
Total Current Assets		896,311		802,315		816,009
Goodwill, Net		1,058,697		996,562		1,002,520
Other Assets, Net		421,303		406,950		402,202
Property, Plant & Equipment, Net		427,817		428,431		415,126
Total Assets	$	2,804,128	$	2,634,258	$	2,635,857
Liabilities and Stockholders’ Equity
Current Liabilities:
Notes Payable to Banks	$	236,667	$	168,208	$	161,243
Trade Accounts Payable		250,348		234,446		233,512
Income Taxes		68,470		45,254		62,311
Accrued Liabilities		234,938		270,303		235,390
Total Current Liabilities		790,423		718,211		692,456
Long Term Debt		615,367		549,073		607,435
Deferred Liabilities		367,860		366,611		358,750
Stockholders’ Equity		1,030,478		1,000,363		977,216
Total Liabilities and Stockholders’ Equity	$	2,804,128	$	2,634,258	$	2,635,857