The Valspar Corporation reported second quarter 2014 net sales of $1.1 billion, an increase of 10 percent over the prior year. Reported net income and earnings per diluted share for the current year includes nonrecurring items, which are detailed in the “Reconciliation of Non-GAAP Financial Measures” included in this release. Second quarter 2014 adjusted net income and earnings per diluted share, excluding these nonrecurring items, were $93 million and $1.07, respectively. Second quarter 2013 adjusted net income and earnings per diluted share were $83 million and $0.91, respectively.
“We are pleased to report another strong quarter of volume and sales growth from both our Coatings and Paints segments,” said Gary E. Hendrickson, chairman and chief executive officer. “We are successfully executing our growth plans by integrating acquisitions, scaling new business wins and improving productivity. These efforts are evident in our results as sales for the first half of the fiscal year increased 9 percent and adjusted diluted EPS is up 17 percent. We remain focused on executing these initiatives to achieve our full year sales and earnings growth objectives.”
Net sales in the Paints segment increased 8 percent to $472 million in the second quarter of 2014. Volume increased in all geographic regions including the U.S., China and Australia. Volume growth in the U.S. increased over 10 percent. Paints segment adjusted earnings before interest and taxes (EBIT) of $57 million was down slightly from the prior year due to planned increases in advertising and marketing investments to support new retail programs in both the home improvement and independent hardware channels, and higher incentive compensation expense.
Net sales in the Coatings segment increased 12 percent to $603 million in the second quarter of 2014. Excluding acquisitions, volumes in the segment increased 4 percent. Volume growth was led by another quarter of increases in Packaging coatings and Wood coatings. General Industrial and Coil coatings volumes declined mid-single digits in the second quarter due to uneven end market demand and supply chain disruptions caused by inclement weather conditions in the U.S. Coatings segment adjusted EBIT of $101 million increased 21 percent as a result of acquisitions, increased volume, improved sales mix and productivity initiatives.