EXHIBIT 99.1
FOR IMMEDIATE RELEASE AUGUST 11, 2003
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VALSPAR REPORTS THIRD QUARTER RESULTS
MINNEAPOLIS, MINNESOTA - The Valspar Corporation (NYSE-VAL), a leading coatings
manufacturer, today reported net income for the third quarter ended July 25,
2003 of $40,114,000 versus net income of $38,054,000 for the comparable period
last year. Diluted earnings were $0.77 per share, up 4.1% from $0.74 reported a
year ago. Sales for the quarter increased 4.0% to $598,179,000, compared to
$575,043,000 last year.
Net income for the first nine months of 2003 was $87,889,000 or $1.70 per
diluted share, compared with $85,196,000 or $1.66 per diluted share for the same
period a year ago. Sales for the first nine months increased 4.4% to
$1,628,920,000, compared to $1,560,085,000 during the comparable period a year
ago.
Commenting on third quarter results, Richard M. Rompala, Chairman and Chief
Executive Officer, said, "We are pleased with our third quarter results in light
of the difficult market conditions, which include a weak industrial economy, raw
material cost pressures and until July, soft retail demand for architectural
coatings. Our packaging and architectural coatings product lines have continued
to deliver improved financial results while our industrial coatings financial
performance has been constrained by soft demand. We continue to focus on cash
flow and cost reduction initiatives and believe we are well positioned to
generate stronger earnings growth as market conditions improve."
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, August 11th at 10:00 AM
CDT. The call can be heard live over the Internet at Valspar's website at
http://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 693628.
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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 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 25, 2003 and July 26, 2002
(Dollars in thousands, Third Quarter Year-To-Date
except per share amounts) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
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2003 2002 2003 2002
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NET SALES $ 598,179 $ 575,043 $ 1,628,920 $ 1,560,085
COST OF SALES 403,908 385,156 1,113,084 1,053,301
OPERATING EXPENSES 117,254 112,614 338,021 328,054
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INCOME FROM OPERATIONS 77,017 77,273 177,815 178,730
INTEREST EXPENSE 11,077 13,016 34,403 36,293
OTHER EXPENSE/(INCOME), NET 1,240 1,358 1,655 1,616
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INCOME BEFORE INCOME TAXES 64,700 62,899 141,757 140,821
INCOME TAXES 24,586 24,845 53,868 55,625
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NET INCOME $ 40,114 $ 38,054 $ 87,889 $ 85,196
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NET INCOME PER COMMON SHARE-BASIC $ 0.79 $ 0.76 $ 1.75 $ 1.71
NET INCOME PER COMMON SHARE-DILUTED $ 0.77 $ 0.74 $ 1.70 $ 1.66
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AVERAGE NUMBER OF SHARES O/S-BASIC 50,500,156 49,946,161 50,365,736 49,785,690
AVERAGE NUMBER OF SHARES O/S-DILUTED 51,889,457 51,526,402 51,783,890 51,186,179
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THE VALSPAR CORPORATION
CONSOLIDATED BALANCE SHEETS
July 25, October 25, July 26,
(Dollars in thousands) 2003 2002 2002
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ASSETS (Unaudited) (Unaudited)
CURRENT ASSETS:
CASH AND CASH EQUIVALENTS $ 20,625 $ 22,715 $ 19,226
ACCOUNTS RECEIVABLE, NET 411,088 368,134 401,460
INVENTORIES 208,698 200,645 212,121
OTHER 103,340 110,294 120,237
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TOTAL CURRENT ASSETS 743,751 701,788 753,044
GOODWILL, NET 957,615 938,759 941,465
OTHER ASSETS, NET 389,200 376,530 355,176
PROPERTY, PLANT & EQUIPMENT, NET 410,934 402,475 389,300
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TOTAL ASSETS $2,501,500 $2,419,552 $2,438,985
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
NOTES PAYABLE TO BANKS $ 47,689 $ 40,579 $ 30,311
TRADE ACCOUNTS PAYABLE 201,885 197,047 208,865
INCOME TAXES 54,032 20,998 45,360
ACCRUED LIABILITIES 232,615 245,271 242,131
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TOTAL CURRENT LIABILITIES 536,221 503,895 526,667
LONG TERM DEBT 818,104 885,819 956,666
DEFERRED LIABILITIES 302,661 292,585 229,322
STOCKHOLDERS' EQUITY 844,514 737,253 726,330
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $2,501,500 $2,419,552 $2,438,985
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