CLEVELAND, Jan. 28, 2016
/PRNewswire/ -- The Sherwin-Williams Company (NYSE: SHW)
announced its financial results for the year and fourth quarter
ended December 31, 2015. Compared to the same periods in 2014,
consolidated net sales increased $209.8
million, or 1.9%, to $11.34
billion in the year and increased $35.2 million, or 1.4%, to $2.60 billion in the quarter due primarily to
higher paint sales volume in our Paint Stores and Consumer Groups.
Unfavorable currency translation rate changes decreased
consolidated net sales 3.3% in the year and 3.6% in the
quarter.
Diluted net income per common share in the year increased to
$11.16 per share from $8.78 per share in 2014 and increased in the
quarter to $2.12 per share compared
to $1.37 per share a year ago. The
increases in full year and fourth quarter diluted net income per
common share were due primarily to improved operating results of
the Paint Stores and Consumer Groups. Unfavorable currency
translation rate changes decreased diluted net income per common
share by $.26 per share for the year
and $.06 per share in the
quarter.
Net sales in the Paint Stores Group increased 5.2% to
$7.21 billion in the year and
increased 5.9% to $1.68 billion in
the quarter due primarily to higher architectural paint sales
volume across all end market segments. Net sales from stores open
for more than twelve calendar months increased 4.2% in the year and
5.1% in the quarter over last year's comparable periods. Paint
Stores Group segment profit increased to $1.43 billion in the year from $1.20 billion last year and increased to
$316.1 million in the quarter from
$247.5 million last year due
primarily to higher paint sales volume. Segment profit as a percent
to net sales increased in the year to 19.9% from 17.5% in 2014 and
increased in the quarter to 18.9% from 15.6% last year.
Net sales of the Consumer Group increased 11.1% to $1.58 billion in the year and increased 13.6% to
$314.6 million in the quarter due
primarily to sales of HGTV HOME® by Sherwin-Williams paint to
Lowe's stores. Segment profit increased to $308.8 million in the year from $252.9 million last year and increased
$20.6 million to $50.9 million from $30.3
million last year due primarily to improved operating
efficiencies. As a percent to net external sales, segment profit
increased in the year to 19.6% from 17.8% in 2014 and increased in
the quarter to 16.2% from 11.0% last year.
The Global Finishes Group's net sales stated in U.S. dollars
decreased 7.9% to $1.92 billion in
the year and decreased 9.5% to $454.8
million in the quarter. Unfavorable currency translation
rate changes decreased net sales 7.5% and 7.1% in the year and
quarter, respectively. Stated in U.S. dollars, segment profit in
the year was essentially flat at $201.9
million compared to $201.1
million last year due primarily to decreasing raw material
costs and good cost control partially offset by unfavorable
currency translation rate changes and a gain on the early
termination of a customer agreement in the third quarter 2014.
Segment profit increased in the quarter to $50.6 million from $39.0
million last year due primarily to decreasing raw material
costs and good cost control partially offset by unfavorable
currency translation rate changes. Unfavorable foreign currency
translation rate changes decreased segment profit $26.5 million in the year and $4.9 million in the quarter. As a percent to net
external sales, segment profit was 10.5% in twelve months 2015
compared to 9.7% in 2014 and 11.1% in the quarter versus 7.8% last
year.
The Latin America Coatings Group's net sales stated in U.S.
dollars decreased 18.2% to $631.0
million in the year and decreased 23.5% to $158.7 million in the quarter due primarily to
unfavorable currency translation rate changes and lower paint sales
volume partially offset by selling price increases. Unfavorable
currency translation rate changes decreased net sales by 19.3% and
21.4% in the year and quarter, respectively. Stated in U.S.
dollars, segment profit in the year decreased to $18.5 million compared to $40.5 million last year and decreased to
$2.8 million in the quarter from
$13.0 million last year due primarily
to increasing raw material costs, lower paint sales volume, and
unfavorable currency translation rate changes partially offset by
selling price increases. Foreign currency translation rate changes
reduced segment profit $16.0 million
in the year and decreased segment profit $5.3 million in the quarter. As a percent to net
external sales, segment profit was 2.9% in twelve months compared
to 5.2% in 2014 and 1.8% in the quarter versus 6.3% in the fourth
quarter last year.
The Company acquired 1.00 million shares of its common stock
through open market purchases in the quarter bringing our total
purchased to 3.58 million shares in the year. The Company had
remaining authorization at December 31, 2015 to purchase 11.65
million shares.
Commenting on the financial results, John G. Morikis, President and Chief Executive
Officer, said, "It is gratifying to report another year of record
performances in sales, net income, which surpassed $1.0 billion for the first time, earnings per
share, earnings before interest, taxes, depreciation and
amortization and net operating cash.
"Over the past year, our Paint Stores Group grew architectural
sales volume across every end market segment and delivered positive
operating results. The Consumer Group improved its operating
results through improved operating efficiencies. The HGTV HOME® by
Sherwin-Williams paint program continues to drive sales
improvements in Consumer Group. Our Global Finishes Group improved
segment profit as a percent to sales through greater operating
efficiencies and good cost control. The Latin America Coatings
Group continues to manage through the negative effects of currency
devaluation and weak end market demand in some geographies by
raising selling prices and good cost control.
"We continue to generate significant cash from operations
allowing us to invest in the business and return a substantial
portion to our shareholders. In 2015, we generated net operating
cash flow of $1.45 billion. Our
working capital ratio (accounts receivable plus inventories less
accounts payable to sales) at December 31, 2015 was 8.6%
compared to 10.1% last year. In 2015, we added 83 net new stores,
finishing the year with 4,086 stores in operation. During the year,
we continued to buy our stock on the open market and increased our
annual cash dividend approximately 22% to $2.68 per common share. Our balance sheet remains
flexible and is positioned well for future acquisitions and other
investments in our business.
"In the first quarter of 2016, we anticipate our consolidated
net sales will increase a low single digit percentage compared to
the first quarter of 2015. At that anticipated sales level, we
estimate diluted net income per common share in the first quarter
of 2016 will be in the range of $1.50 to
$1.65 per share compared to $1.38 per share earned in the first quarter of
2015. For the full year 2016, we expect consolidated net sales to
increase a low single digit percentage compared to full year 2015.
With annual sales at that level, we anticipate diluted net income
per common share for 2016 will be in the range of $12.20 to $12.40 per share compared to
$11.16 per share earned in 2015."
The Company will conduct a conference call to discuss its
financial results for the fourth quarter and year 2015, and its
outlook for the first quarter and full year 2016, at 11:00 a.m. EST on Thursday, January 28,
2016. The conference call will be webcast simultaneously in the
listen only mode by Issuer Direct. 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 January 28th release. The webcast will
also be available at Issuer Direct's 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, February 17, 2016 at
5:00 p.m. EST.
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®, HGTV
HOME® by Sherwin-Williams, Dutch Boy®,
Krylon®, Minwax®, Thompson's® Water Seal®,
and many more. With global headquarters in Cleveland, Ohio, Sherwin-Williams®
branded products are sold exclusively through a chain of more than
4,100 company-operated stores and facilities, while the company's
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
115 countries around the world. For more information, visit
www.sherwin.com.
This press release contains certain "forward-looking
statements", as defined under U.S. federal securities laws, with
respect to sales, earnings and other matters. These forward-looking
statements are based upon management's current expectations,
estimates, assumptions and beliefs concerning future events and
conditions. Readers are cautioned not to place undue reliance on
any forward-looking statements. Forward-looking statements are
necessarily subject to risks, uncertainties and other factors, many
of which are outside the control of the Company, that could cause
actual results to differ materially from such statements and from
the Company's historical results and experience. These risks,
uncertainties and other factors include such things as: general
business conditions, strengths of retail and manufacturing
economies and the growth in the coatings industry; changes in the
Company's relationships with customers and suppliers; changes in
raw material availability and pricing; unusual weather conditions;
and other risks, uncertainties and factors described from time to
time in the Company's reports filed with the Securities and
Exchange Commission. Since it is not possible to predict or
identify all of the risks, uncertainties and other factors that may
affect future results, the above list should not be considered a
complete list. Any forward-looking statement speaks only as of the
date on which such statement is made, and the Company undertakes no
obligation to update or revise any forward-looking statement,
whether as a result of new information, future events or
otherwise.
Investor Relations Contact:
Bob Wells
Senior Vice President, Corporate Communications and Public
Affairs
Sherwin-Williams
Direct: 216.566.2244
rjwells@sherwin.com
Media Contact:
Mike
Conway
Director, Corporate Communications
Sherwin-Williams
Direct: 216.515.4393
Pager: 216.422.3751
mike.conway@sherwin.com
The
Sherwin-Williams Company and Subsidiaries
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Statements of
Consolidated Income (Unaudited)
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Three Months Ended
December 31,
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Year Ended December
31,
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Thousands of dollars,
except per share data
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2015
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2014
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2015
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2014
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Net sales
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$
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2,604,596
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$
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2,569,412
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$
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11,339,304
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$
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11,129,533
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Cost of goods
sold
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1,282,357
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1,351,437
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5,780,078
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5,965,049
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Gross
profit
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1,322,239
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1,217,975
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5,559,226
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5,164,484
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Percent to net
sales
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50.8%
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47.4%
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49.0%
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46.4%
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Selling, general and
administrative expenses
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991,472
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985,329
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3,913,518
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3,822,966
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Percent to net
sales
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38.1%
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38.3%
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34.5%
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34.3%
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Other general expense
- net
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12,853
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25,411
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30,268
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37,482
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Interest
expense
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19,560
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15,412
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61,791
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64,205
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Interest and net
investment income
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(456)
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(885)
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(1,399)
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(2,995)
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Other expense
(income) - net
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1,589
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3,837
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6,082
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(15,400)
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Income before income
taxes
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297,221
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188,871
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1,548,966
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1,258,226
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Income
taxes
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99,204
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56,128
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495,117
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392,339
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Net income
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$
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198,017
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$
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132,743
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$
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1,053,849
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$
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865,887
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Net income per common
share:
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Basic
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$
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2.15
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$
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1.40
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$
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11.38
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$
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8.95
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Diluted
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$
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2.12
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$
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1.37
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$
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11.16
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$
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8.78
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Average shares
outstanding - basic
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91,591,944
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94,527,134
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92,197,207
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96,190,101
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Average shares and
equivalents outstanding - diluted
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93,188,994
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96,441,049
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94,024,136
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98,075,435
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Additional
information regarding the Company's 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 January 28th
release.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/the-sherwin-williams-company-reports-2015-year-end-financial-results-300211331.html
SOURCE The Sherwin-Williams Company