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8-K - FORM 8-K - SHERWIN WILLIAMS CO | l42456e8vk.htm |
EXHIBIT 99
NEWS:
Cleveland, Ohio 44115 (216) 566-2140
The
Sherwin-Williams Company Reports First Quarter 2011 Financial Results
| Consolidated net sales increased 18.5% to a record $1.86 billion | |
| Diluted income per common share increased 110.0% to $.63 per share from $.30 per share in 1Q10 | |
| 2Q11 guidance sales increase of 8% to 13%; 2Q11 EPS range $1.65 to $1.75 per share | |
| Reaffirming FY11 EPS guidance of $4.65 to $5.05 per share |
CLEVELAND, OHIO, April 21, 2011 The Sherwin-Williams Company (NYSE: SHW) announced its
financial results for the first quarter ended March 31, 2011. Compared to the same period in 2010,
consolidated net sales increased $290.1 million, or 18.5%, to $1.86 billion in the quarter due
primarily to acquisitions and selling price increases. Acquisitions and favorable currency
translation rate changes increased consolidated net sales 9.0% and 1.2%, respectively.
Diluted net income per common share in the quarter increased 110.0% to $.63 per share from $.30 per
share in 2010 due primarily to higher sales, expense control, and a lower effective tax rate. The
first quarter 2010 income tax expense included an $11.4 million one-time increase relating to the Health Care
and Education Reconciliation Act of 2010 passed in the first quarter 2010. Foreign currency
translation rate changes and acquisitions had no significant impact on diluted net income per
common share in the quarter.
Net sales in the Paint Stores Group increased 9.2% to $929.3 million in the quarter due primarily
to selling price increases, improving domestic architectural paint sales to DIY and residential
repaint customers and improving protective and marine product sales. During the quarter, net sales
from stores open for more than twelve calendar months increased 8.9% over last years first
quarter. Paint Stores Group segment profit increased to $68.9 million in the quarter from $47.8
million last year due primarily to selling price increases partially offset by raw material cost
increases. Segment profit as a percent to net sales increased to 7.4% from 5.6% last year.
Net sales of the Consumer Group increased 1.0% to $294.9 million in the quarter due primarily to
selling price increases and the timing of seasonal shipments to some customers partially offset by
the elimination of a portion of a paint program with a large retail customer. Segment profit
increased to $41.1 million in the quarter from $37.5 million last year. Segment profit as a percent
of net external sales increased to 13.9% from 12.8% last year due primarily to good cost control
and selling price increases partially offset by increasing raw material costs.
The Global Finishes Groups net sales stated in U.S. dollars increased 49.6% to $630.2 million in
the quarter due primarily to acquisitions, higher paint sales volume, selling price increases, and
favorable currency translation rate changes. In the quarter, acquisitions and favorable currency
translation rate changes increased net sales of the Global Finishes Group in U.S. dollars by 33.3%
and 3.6%, respectively. Stated in U.S. dollars, Global Finishes Group segment profit in the quarter
increased to $36.8 million from $23.0 million in last years first quarter due primarily to
increased paint sales volume and good expense control. Foreign currency translation rate changes
and acquisitions increased segment profit in the quarter by $1.6 million. As a percent to net
external sales, segment profit was 5.8% in the quarter versus 5.5% last year.
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The Company acquired 1.1 million shares of its common stock through open market purchases in the
quarter and had remaining authorization at March 31, 2011 to purchase 4.65 million shares.
Commenting on the first quarter, Christopher M. Connor, Chairman and Chief Executive Officer, said,
Although domestic demand remains soft, we are encouraged by the improvement in domestic DIY and
protective and marine sales in the Paint Stores Group and continued growth in architectural,
protective and marine, OEM and automotive finishes sales in the Global Group. Our Consumer Group
improved their operating results through disciplined cost management and selling price increases.
Our operating segment management teams continue to control costs and implement price increases in
an effort to keep pace with rising raw material costs.
We continued to invest in our Paint Stores Group business by opening seven net new
locations and staffing our stores to ensure quality customer service. For the year, we expect to
open 50 to 60 net new stores. Our Global Finishes Group acquired three companies over the past
twelve months, including Acroma and Sayerlack in Europe and Pinturas Condor in Ecuador. Although
these acquisitions had a small impact on our first quarter consolidated net income they expand our
global reach and provide important assets to support our world-wide business. During the quarter,
we used our cash to continue to buy shares of stock and we increased the dividend rate to $.365
from $.36 last year. Our balance sheet remains flexible and is positioned for future acquisitions
and investments in our business.
For the second quarter, we anticipate that our consolidated net sales will increase eight to
thirteen percent compared to last years second quarter. We expect diluted net income per common
share for the second quarter to be in the range of $1.65 to $1.75 per share compared to $1.64 per
share in 2010. For the full year 2011, we expect consolidated net sales to increase above 2010
levels by a high single digit percentage. With annual sales at that level, we are reaffirming our
guidance that diluted net income per common share for 2011 is expected to be in the range of $4.65
to $5.05 per share compared to $4.21 per share earned in 2010.
The Company will conduct a conference call to discuss its financial results for the first quarter
and its outlook for the second quarter and full year 2011 at 11:00 a.m. ET on Thursday, April 21,
2011. The conference call will be webcast simultaneously in the listen only mode by Vcall. To
listen to the webcast on the Sherwin-Williams website, www.sherwin.com, click on About Us, choose
Investor Relations, then select Press Releases and click on the webcast icon following the
reference to the April 21st release. The webcast will also be available at Vcalls
Investor Calendar website, www.investorcalendar.com. An archived replay of the live webcast will be
available at www.sherwin.com beginning approximately two hours after the call ends and will be
available until Wednesday, May 11, 2011 at 5:00 p.m. ET.
Founded in 1866, The Sherwin-Williams Company is a global leader in the manufacture, development,
distribution, and sale of coatings and related products to professional, industrial, commercial,
and retail customers. The company manufactures products under well-known brands such as
Sherwin-Williams®, Dutch Boy®, Krylon®, Minwax®,
Thompsons® Water Seal®, and many more. With global headquarters in
Cleveland, Ohio, Sherwin-Williams® branded products are sold exclusively through a chain
of more than 3,900 company-operated stores and facilities, while the companys other brands are
sold through leading mass merchandisers, home centers, independent paint dealers, hardware stores,
automotive retailers, and industrial distributors. The Sherwin-Williams Global Finishes Group
distributes a wide range of products in more than 109 countries around the world. For more
information, visit www.sherwin.com.
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Contacts:
Bob Wells
Senior Vice President Corporate Communications and Public Affairs
Sherwin-Williams
Direct: 216.566.2244
rjwells@sherwin.com
Senior Vice President Corporate Communications and Public Affairs
Sherwin-Williams
Direct: 216.566.2244
rjwells@sherwin.com
Mike Conway
Director Corporate Communications and Investor Relations
Sherwin-Williams
Direct: 216.515.4393
Pager: 216.422.3751
mike.conway@sherwin.com
Director Corporate Communications and Investor Relations
Sherwin-Williams
Direct: 216.515.4393
Pager: 216.422.3751
mike.conway@sherwin.com
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The Sherwin-Williams Company and Subsidiaries
Statements of Consolidated Income (Unaudited)
Statements of Consolidated Income (Unaudited)
Three Months Ended March 31, | ||||||||
Thousands of dollars, except per share data | 2011 | 2010 | ||||||
Net sales |
$ | 1,855,586 | $ | 1,565,482 | ||||
Cost of goods sold |
1,058,178 | 873,514 | ||||||
Gross profit |
797,408 | 691,968 | ||||||
Percent to net sales |
43.0 | % | 44.2 | % | ||||
Selling, general and administrative expenses |
691,123 | 612,875 | ||||||
Percent to net sales |
37.2 | % | 39.1 | % | ||||
Other general expense net |
1,172 | 1,906 | ||||||
Interest expense |
10,675 | 11,570 | ||||||
Interest and net investment income |
(323 | ) | (639 | ) | ||||
Other expense net |
48 | 6,798 | ||||||
Income before income taxes |
94,713 | 59,458 | ||||||
Income taxes |
26,397 | 26,855 | ||||||
Net income |
$ | 68,316 | $ | 32,603 | ||||
Net income per common share*: |
||||||||
Basic |
$ | .64 | $ | .30 | ||||
Diluted |
$ | .63 | $ | .30 | ||||
Average shares outstanding basic |
104,991,014 | 107,959,598 | ||||||
Average shares and equivalents outstanding diluted |
107,362,669 | 109,494,011 | ||||||
* Presented using the two-class method.
Additional information regarding the Companys financial condition, operating segment results and
other information can be found on the Sherwin-Williams website, www.sherwin.com, by clicking on
About Us, choosing Investor Relations, then selecting Press Releases and clicking on the reference to
the April 21st release.
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