EXHIBIT 99.1
FOR IMMEDIATE RELEASE February 10, 2003
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VALSPAR REPORTS FIRST QUARTER RESULTS
MINNEAPOLIS, MINNESOTA - The Valspar Corporation (NYSE-VAL), a leading coatings
manufacturer, today reported net income for the first quarter ended January 24,
2003 of $15,618,000, versus net income of $12,608,000 for the comparable period
last year. Diluted earnings were $0.30 per share, up 20% from $0.25 per share
last year. Sales for the quarter increased 8.8% to $468,971,000, compared to
$431,040,000 a year ago.
Commenting on first quarter results and the outlook for the year, Richard M.
Rompala, Chairman and Chief Executive Officer, said, "We have seen a
continuation of the trends from last year, including soft demand in the
industrial markets. Nevertheless, we achieved strong sales growth with market
share gains in all of our product lines. We believe that our growth and cost
initiatives will continue to augment our performance in this challenging
business environment and that we remain on track to achieve 15% earnings growth
in 2003."
Commenting on expectations for the second quarter, Mr. Rompala stated,
"Political and economic uncertainties are clouding our short-term outlook. In
the event of an outbreak of war such as we experienced in 1991, we would expect
a temporary slowdown in sales and earnings momentum. Assuming a continuation of
current business conditions, we expect diluted earnings for the second quarter
of 2003 to be in the range of 70(cent) to 75(cent) per share, compared to
67(cent) per share in the comparable period a year ago."
Contact: Deborah D. Weiss, Vice President and Treasurer - The Valspar
Corporation - 612/375-7302
Note: Valspar will host a conference call on Monday, February 10th at 10:00 AM
CST. The call can be heard live over the Internet at Valspar's website at
http://www.valspar.com under Investor Relations or at WWW.SHAREHOLDER.COM/VAL.
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 800-475-6701 in the U.S. and 1-320-365-3844 outside the U.S.,
beginning at 12:00 Noon and using access code 672749.
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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 obligation 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 January 24, 2003 and January 25, 2002
(Dollars in thousands, except per share amounts) (Unaudited) (Unaudited)
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2003 2002
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NET SALES $ 468,971 $ 431,040
COST OF SALES 325,323 299,340
OPERATING EXPENSES 106,501 98,160
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INCOME FROM OPERATIONS 37,147 33,540
INTEREST EXPENSE 11,817 12,224
OTHER EXPENSE/(INCOME), NET 140 476
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INCOME BEFORE INCOME TAXES 25,190 20,840
INCOME TAXES 9,572 8,232
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NET INCOME $ 15,618 $ 12,608
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NET INCOME PER COMMON SHARE-BASIC $ 0.31 $ 0.25
NET INCOME PER COMMON SHARE-DILUTED $ 0.30 $ 0.25
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AVERAGE NUMBER OF SHARES O/S-BASIC 50,205,519 49,547,786
AVERAGE NUMBER OF SHARES O/S-DILUTED 51,558,029 50,986,521
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THE VALSPAR CORPORATION
CONSOLIDATED BALANCE SHEETS
January 24, October 25, January 25,
(Dollars in thousands) 2003 2002 2002
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ASSETS (UNAUDITED) (UNAUDITED)
CURRENT ASSETS:
CASH AND CASH EQUIVALENTS $ 26,967 $ 22,715 $ 23,343
ACCOUNTS RECEIVABLE, NET 358,990 368,134 332,697
INVENTORIES 218,746 200,645 201,229
OTHER 107,541 110,294 105,085
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TOTAL CURRENT ASSETS 712,244 701,788 662,354
GOODWILL, NET 946,476 938,759 937,049
OTHER ASSETS, NET 381,938 376,530 366,373
PROPERTY, PLANT & EQUIPMENT, NET 402,919 402,475 387,829
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TOTAL ASSETS $ 2,443,577 $ 2,419,552 $ 2,353,605
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
NOTES PAYABLE TO BANKS $ 55,607 $ 40,579 $ 61,900
TRADE ACCOUNTS PAYABLE 184,459 197,047 166,431
INCOME TAXES 32,965 20,998 28,142
ACCRUED LIABILITIES 220,281 245,271 195,322
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TOTAL CURRENT LIABILITIES 493,312 503,895 451,795
LONG TERM DEBT 890,236 885,819 1,003,248
DEFERRED LIABILITIES 300,273 292,585 233,076
STOCKHOLDERS' EQUITY 759,756 737,253 665,486
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,443,577 $ 2,419,552 $ 2,353,605
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