Valspar Reports Lower Third-Quarter Results
August 18, 2008
MINNEAPOLIS, MN - The Valspar Corp. has reported its results for the third quarter ended July 25, 2008. Third-quarter sales totaled $957.7 million, a 7.2 percent increase from the third quarter of 2007. Net income for the third quarter was $47.0 million. Third-quarter adjusted net income per share was $0.50, which excludes a $0.03-per-share charge related to restructuring actions and a $0.03-per-share non-cash adjustment for Huarun minority interest. In 2007, third-quarter net income was $58.2 million, or adjusted net income per share of $0.57, excluding a non-cash adjustment of $0.05 per share for Huarun minority interest. Third-quarter reported earnings per share were $0.44 in 2008, down from $0.52 in 2007.
The company has initiated a comprehensive series of actions to lower its cost structure and further increase the efficiency of its operations. These restructuring actions resulted in a $0.03-per-share charge to third-quarter earnings and are expected to result in additional charges to earnings of $0.10 to $0.12 per share in the fourth quarter of fiscal 2008. The impact on earnings in fiscal 2009 is expected to be neutral, with savings offsetting in-year costs. Beginning in fiscal 2010, these actions are expected to generate ongoing savings of $0.12 to $0.14 per share.
"Results for the quarter were in line with our expectations," said William L. Mansfield, Valspar Chairman and Chief Executive Officer. "Strong results from our international businesses, new business and pricing helped to partially offset the impact of substantially higher raw material costs and the weak U.S. economy."
Looking ahead, the company anticipates ongoing pressure on raw material costs and continued weakness in the U.S. economy. "We remain focused on improving our competitive position," said Mansfield. "We are moving forward with restructuring actions to further improve the efficiency of our business, implementing additional price increases and continuing to invest in our brands. We expect fiscal 2008 adjusted net income per share to be in the range of $1.55 to $1.65.”