EXHIBIT 99.1
FOR IMMEDIATE RELEASE NOVEMBER 24, 2003
VALSPAR REPORTS FULL YEAR RESULTS
MINNEAPOLIS, MINNESOTA - The Valspar Corporation (NYSE-VAL), a leading coatings
manufacturer, today reported net income for the fourth quarter ended October 31,
2003 of $24,627,000 versus net income of $34,925,000 for the comparable period
last year. Fourth quarter results for 2003 include the previously announced
charge of $15,200,000 or $0.29 per share for estimated future service claims
expense associated with its furniture protection plans. Diluted earnings were
$0.47 per share, which includes the $0.29 effect of the charge, versus $0.68
reported a year ago. Sales for the quarter increased 9.2% to $619,006,000
compared to $566,768,000 last year.
Net income for the full year was $112,514,000 or $2.17 per diluted share
including the previously announced charge of $0.29 per share compared with
$120,121,000 or $2.34 per diluted share for last year. Sales for the year
increased 5.7% to $2,247,926,000 compared to $2,126,853,000 during fiscal year
2002.
Commenting on fourth quarter and full year results, Richard M. Rompala, Chairman
and Chief Executive Officer, said, "We are pleased with our 2003 results in
light of the challenging market conditions. Despite a weak industrial economy
and raw material cost pressures, we achieved record results before the charge to
earnings. Soft industrial coatings markets through most of the year restricted
growth in this product line. This was more than offset by strong performances
from our architectural and packaging coatings product lines. In addition, we
generated very strong cash flow--enough to fund over $50 million of capital
investments and to reduce debt by $150 million. As a result, we believe we are
well positioned for both internal and external growth. Based on current economic
conditions, we expect results for fiscal 2004 to be in the range of $2.70 to
$2.85 per share."
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, November 24th 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. 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 705678.
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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.
COMPARATIVE CONSOLIDATED EARNINGS
For the Quarters Ended October 31, 2003 and October 25, 2002
Fourth Quarter Year-To-Date
(Dollars in thousands, except per share amounts) (Unaudited) (Unaudited)
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2003* 2002 2003* 2002
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NET SALES $ 619,006 $ 566,768 $ 2,247,926 $ 2,126,853
COST OF SALES 429,060 376,883 1,542,144 1,430,184
OPERATING EXPENSES 140,256 119,010 478,279 447,064
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INCOME FROM OPERATIONS 49,690 70,875 227,503 249,605
INTEREST EXPENSE 11,440 12,418 45,843 48,711
OTHER EXPENSE/(INCOME), NET (1,469) 730 186 2,346
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INCOME BEFORE INCOME TAXES 39,719 57,727 181,474 198,548
INCOME TAXES 15,092 22,802 68,960 78,427
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NET INCOME $ 24,627 $ 34,925 $ 112,514 $ 120,121
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NET INCOME PER COMMON SHARE-BASIC $ 0.49 $ 0.70 $ 2.23 $ 2.41
NET INCOME PER COMMON SHARE-DILUTED $ 0.47 $ 0.68 $ 2.17 $ 2.34
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AVERAGE NUMBER OF SHARES O/S-BASIC 50,635,991 50,095,914 50,435,929 49,892,689
AVERAGE NUMBER OF SHARES O/S-DILUTED 52,282,806 51,284,814 51,924,280 51,370,391
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*Includes a charge to net income of $15.2 million or $0.29 per share for
estimated future service claims expense associated with the Company's furniture
protection plans.
THE VALSPAR CORPORATION
CONSOLIDATED BALANCE SHEETS
October 31, October 25,
(Dollars in thousands) 2003 2002
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ASSETS
CURRENT ASSETS:
CASH AND CASH EQUIVALENTS $ 41,589 $ 22,715
ACCOUNTS RECEIVABLE, NET 385,178 368,134
INVENTORIES 192,251 200,645
OTHER 119,813 110,294
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TOTAL CURRENT ASSETS 738,831 701,788
GOODWILL, NET 961,915 938,759
OTHER ASSETS, NET 381,559 376,530
PROPERTY, PLANT & EQUIPMENT, NET 414,219 402,475
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TOTAL ASSETS $2,496,524 $2,419,552
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
NOTES PAYABLE TO BANKS $ 26,200 $ 40,579
TRADE ACCOUNTS PAYABLE 202,713 197,047
INCOME TAXES 48,458 20,998
ACCRUED LIABILITIES 253,165 240,107
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TOTAL CURRENT LIABILITIES 530,536 498,731
LONG TERM DEBT 749,726 885,819
DEFERRED LIABILITIES 346,945 297,749
STOCKHOLDERS' EQUITY 869,317 737,253
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $2,496,524 $2,419,552
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