12.21.16
The Valspar Corporation has reported fiscal fourth quarter 2016 (ended October 28, 2016) net sales of $1.11 billion, a decrease of 4 percent over the prior year period. This includes the effects of foreign currency translation that negatively impacted net sales by 1 percent. Fiscal fourth quarter 2016 net income of $104 million and earnings per diluted share (EPS) of $1.27 both increased 1 percent.
Fiscal fourth quarter 2016 net income of $104 million includes the impact of the following after-tax items: restructuring and other asset-related charges of approximately $5 million and expenses related to the proposed merger with The Sherwin-Williams Company of approximately $3 million. In total, these items negatively impacted fiscal fourth quarter 2016 diluted EPS by approximately $0.10. Fiscal fourth quarter 2015 net income of $102 million included the impact of the following after-tax items: restructuring charges of approximately $6 million and acquisition charges of approximately $1 million. In total, these items negatively impacted fiscal fourth quarter 2015 diluted EPS by approximately $0.08.
Fiscal year 2016 net sales were $4.19 billion, a decrease of 5 percent over the prior year period. This includes the effects of foreign currency translation that negatively impacted net sales by 3 percent, and acquisitions added 3 percent to net sales in the year. Fiscal 2016 net income of $353 million decreased 12 percent and diluted EPS of $4.36 decreased 10 percent.
Fiscal 2016 net income of $353 million includes the impact of the following after-tax items: restructuring and other asset-related charges of approximately $19 million, expenses related to the proposed merger with The Sherwin-Williams Company of approximately $18 million and acquisition charges of approximately $1 million. In total, these items negatively impacted fiscal 2016 diluted EPS by approximately $0.46. Fiscal 2015 net income of $400 million included the impact of the following after-tax items: a gain on sale of certain assets of approximately $37 million, restructuring charges of approximately $15 million and acquisition charges of approximately $4 million. In total, these items positively impacted fiscal 2015 diluted EPS by approximately $0.23.
Coatings Segment Results
Fiscal fourth quarter 2016 net sales in the Coatings segment decreased 2 percent to $626 million. This includes the effects of foreign currency translation that negatively impacted net sales by 2 percent. Acquisitions added 1 percent to net sales in the quarter. Volumes increased 2 percent in the fiscal fourth quarter of 2016. Acquisitions added 1 percent to volume in the quarter. Coatings segment earnings before interest and tax (EBIT) of $109 million decreased 11 percent, primarily driven by the impact of cost/price, higher employee-related costs and lower sales, partially offset by benefits from productivity initiatives.
Fiscal 2016 net sales in the Coatings segment decreased 4 percent to $2.39 billion. This includes the effects of foreign currency translation that negatively impacted net sales by 4 percent. Coatings segment EBIT of $444 million decreased 8 percent, primarily due to the gain on sale of certain assets in the prior year (fiscal 2015), higher employee-related costs and lower sales, partially offset by benefits from productivity initiatives, improvements in cost/price and lower restructuring charges.
Paints Segment Results
Fiscal fourth quarter 2016 net sales in the Paints segment decreased 7 percent to $421 million. This includes the effects of foreign currency translation that negatively impacted net sales by 1 percent. Volume decreased 7 percent in the fiscal fourth quarter of 2016. Paints segment EBIT of $44 million decreased 21 percent, driven by the impact of lower sales and higher employee-related costs, partially offset by benefits from productivity initiatives.
Fiscal 2016 net sales in the Paints segment decreased 6 percent to $1.56 billion. This includes the effects of foreign currency translation that negatively impacted net sales by 2 percent. Acquisitions added 6 percent to net sales in the year. Paints segment EBIT of $150 million decreased 14 percent, driven by impact of lower sales and restructuring and other asset-related charges, partially offset by benefits from productivity initiatives and improvements in cost/price.
Dividends and Share Repurchases
During the quarter, the company paid a quarterly dividend of $0.33 per common share outstanding, or $26 million. For the full year fiscal 2016, the company paid dividends of $105 million, representing a per share increase of 10 percent. Valspar is a member of the S&P High Yield Dividend Aristocrats®, which is comprised of companies increasing dividends every year for at least 20 consecutive years. For the full year fiscal 2016, the company repurchased approximately 200 thousand shares of the Company’s stock for $18 million. There were no shares repurchased after the fiscal first quarter 2016.
Fiscal fourth quarter 2016 net income of $104 million includes the impact of the following after-tax items: restructuring and other asset-related charges of approximately $5 million and expenses related to the proposed merger with The Sherwin-Williams Company of approximately $3 million. In total, these items negatively impacted fiscal fourth quarter 2016 diluted EPS by approximately $0.10. Fiscal fourth quarter 2015 net income of $102 million included the impact of the following after-tax items: restructuring charges of approximately $6 million and acquisition charges of approximately $1 million. In total, these items negatively impacted fiscal fourth quarter 2015 diluted EPS by approximately $0.08.
Fiscal year 2016 net sales were $4.19 billion, a decrease of 5 percent over the prior year period. This includes the effects of foreign currency translation that negatively impacted net sales by 3 percent, and acquisitions added 3 percent to net sales in the year. Fiscal 2016 net income of $353 million decreased 12 percent and diluted EPS of $4.36 decreased 10 percent.
Fiscal 2016 net income of $353 million includes the impact of the following after-tax items: restructuring and other asset-related charges of approximately $19 million, expenses related to the proposed merger with The Sherwin-Williams Company of approximately $18 million and acquisition charges of approximately $1 million. In total, these items negatively impacted fiscal 2016 diluted EPS by approximately $0.46. Fiscal 2015 net income of $400 million included the impact of the following after-tax items: a gain on sale of certain assets of approximately $37 million, restructuring charges of approximately $15 million and acquisition charges of approximately $4 million. In total, these items positively impacted fiscal 2015 diluted EPS by approximately $0.23.
Coatings Segment Results
Fiscal fourth quarter 2016 net sales in the Coatings segment decreased 2 percent to $626 million. This includes the effects of foreign currency translation that negatively impacted net sales by 2 percent. Acquisitions added 1 percent to net sales in the quarter. Volumes increased 2 percent in the fiscal fourth quarter of 2016. Acquisitions added 1 percent to volume in the quarter. Coatings segment earnings before interest and tax (EBIT) of $109 million decreased 11 percent, primarily driven by the impact of cost/price, higher employee-related costs and lower sales, partially offset by benefits from productivity initiatives.
Fiscal 2016 net sales in the Coatings segment decreased 4 percent to $2.39 billion. This includes the effects of foreign currency translation that negatively impacted net sales by 4 percent. Coatings segment EBIT of $444 million decreased 8 percent, primarily due to the gain on sale of certain assets in the prior year (fiscal 2015), higher employee-related costs and lower sales, partially offset by benefits from productivity initiatives, improvements in cost/price and lower restructuring charges.
Paints Segment Results
Fiscal fourth quarter 2016 net sales in the Paints segment decreased 7 percent to $421 million. This includes the effects of foreign currency translation that negatively impacted net sales by 1 percent. Volume decreased 7 percent in the fiscal fourth quarter of 2016. Paints segment EBIT of $44 million decreased 21 percent, driven by the impact of lower sales and higher employee-related costs, partially offset by benefits from productivity initiatives.
Fiscal 2016 net sales in the Paints segment decreased 6 percent to $1.56 billion. This includes the effects of foreign currency translation that negatively impacted net sales by 2 percent. Acquisitions added 6 percent to net sales in the year. Paints segment EBIT of $150 million decreased 14 percent, driven by impact of lower sales and restructuring and other asset-related charges, partially offset by benefits from productivity initiatives and improvements in cost/price.
Dividends and Share Repurchases
During the quarter, the company paid a quarterly dividend of $0.33 per common share outstanding, or $26 million. For the full year fiscal 2016, the company paid dividends of $105 million, representing a per share increase of 10 percent. Valspar is a member of the S&P High Yield Dividend Aristocrats®, which is comprised of companies increasing dividends every year for at least 20 consecutive years. For the full year fiscal 2016, the company repurchased approximately 200 thousand shares of the Company’s stock for $18 million. There were no shares repurchased after the fiscal first quarter 2016.
