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Letter to the Editor
Tuesday August 17
Valspar Q3 Net Income Up 12%
The Valspar Corporation has reported net income for the third quarter ended July 30, 2004 of $44,913,000, up 12.0 percent from net income of $40,114,000 for the comparable period last year. Diluted earnings were $0.85 per share, versus $0.77 reported a year ago. Sales for the quarter increased 9.6% to $655,598,000, compared to $598,179,000 last year.Net income for the first nine months of fiscal 2004 was $102,389,000 or $1.94 per diluted share, compared with $87,889,000 or $1.70 per diluted share for the same period a year ago. Sales for the first nine months increased 10.2 percent to $1,795,576,000 compared to $1,628,920,000 during the comparable period a year ago.
Commenting on the third quarter and the outlook for the fourth quarter, Richard M. Rompala, Chairman and Chief Executive Officer, said, "This quarter's results included a charge of two cents per share for the closure and sale of a manufacturing facility. Core sales growth was strong across all our product lines, particularly industrial and architectural coatings. We have initiated pricing action in all of our businesses, but raw material cost pressures have intensified. While we continue to implement cost reduction measures and productivity improvements, the acceleration in raw material costs has outpaced our pricing actions. As a consequence, we expect this year's fourth quarter earnings to be flat to up slightly compared with last year's fourth quarter earnings of $0.76 per share, which excludes last year's fourth quarter charge of $0.29 per share.
"We recently announced two growth initiatives which will be additive to next year's earnings. On August 4th we acquired the forest products business of Associated Chemists, Inc. Their $28 million wood coatings product line is a great fit with our existing building products business. Last week we announced a strategic alliance with The Quikrete Companies, the leading name in concrete, to manufacture and market a complete line of premium concrete coatings. We believe the Quikrete Professional Concrete Coatings brand will develop a strong position in the home improvement industry."
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