CLEVELAND, Jan. 29, 2015
/PRNewswire/ -- The Sherwin-Williams Company (NYSE: SHW)
announced its financial results for the year and fourth quarter
ended December 31, 2014. Compared to the same periods in 2013,
consolidated net sales increased $944.0
million, or 9.3%, to $11.13
billion in the year due primarily to higher paint sales
volume in our Paint Stores Group and acquisitions. Consolidated net
sales increased $112.4 million, or
4.6%, to $2.57 billion in the quarter
due primarily to higher paint sales volume in our Paint Stores
Group. Acquisitions increased consolidated net sales 3.1% in the
year and had no impact on sales in the quarter. Unfavorable
currency translation rate changes decreased consolidated net sales
1.4% in the year and 2.3% in the quarter.
Diluted net income per common share in the year increased to
$8.78 per share from $7.26 per share in 2013. Full year 2014 included
charges of $.22 per share related to
environmental provisions and an $.18
per share EPS loss from Comex partially offset by an increase of
$.13 per share related to the
previously disclosed titanium dioxide settlement. Full year 2013
included charges of $.21 per share
related to Brazil tax assessments.
Diluted net income per common share in the quarter was $1.37 per share, including charges of
$.16 per share related to
environmental provisions partially offset by the titanium dioxide
settlement, compared to $1.14 per
share a year ago. Unfavorable currency translation rate changes
decreased diluted net income per common share by $.18 per share for the year and $.09 per share in the quarter.
Net sales in the Paint Stores Group increased 14.2% to
$6.85 billion in the year and
increased 8.0% to $1.58 billion in
the quarter due primarily to higher architectural paint sales
volume across all end market segments. Acquisitions increased net
sales 4.5% in the year. Net sales from stores open for more than
twelve calendar months increased 8.8% in the year and 7.5% in the
quarter over last year's comparable periods. Paint Stores Group
segment profit increased to $1.20
billion in the year from $990.5
million last year due primarily to higher paint sales volume
partially offset by the loss from acquisitions. Segment profit
increased to $247.5 million in the
quarter from $168.5 million last year
due primarily to higher paint sales volume. Acquisitions had an
unfavorable impact on segment profit of $32.3 million in the year. Segment profit as a
percent to net sales increased in the year to 17.5% from 16.5% in
2013 and increased in the quarter to 15.6% from 11.5% last
year.
Net sales of the Consumer Group increased 5.9% to $1.42 billion in the year due primarily to
acquisitions and higher volume sales to most of the Group's retail
customers. Net sales increased 1.6% to $276.9 million in the quarter due primarily to
higher volume sales to most of the Group's retail customers.
Acquisitions increased net sales 3.4% in the year. Segment profit
increased to $252.9 million in the
year from $242.1 million last year
due primarily to higher volume sales and operating efficiencies.
Segment profit in the quarter decreased $5.7
million to $30.3 million from
$36.0 million last year due primarily
to increased operating costs in the quarter in advance of the HGTV
HOME® by Sherwin-Williams paint program at Lowe's.
Acquisitions had no significant impact on segment profit in the
year. As a percent to net external sales, segment profit decreased
in the year to 17.8% from 18.0% in 2013 and decreased in the
quarter to 11.0% from 13.2% last year due to increased operating
costs incurred related to the paint program at Lowe's.
The Global Finishes Group's net sales stated in U.S. dollars
increased 3.8% to $2.08 billion in
the year and increased 1.1% to $502.4
million in the quarter due primarily to selling price
increases and higher paint sales volume partially offset by
unfavorable currency translation rate changes. Unfavorable currency
translation rate changes decreased net sales 1.6% and 4.1% in the
year and quarter, respectively. Stated in U.S. dollars, segment
profit in the year increased to $201.1
million from $170.6 million
last year due primarily to improved operating efficiencies, selling
price increases and the $6.3 million
gain on the early termination of a customer agreement in the third
quarter 2014 partially offset by unfavorable currency translation
rate changes. Segment profit increased in the quarter to
$39.0 million from $37.7 million last year due primarily to improved
operating efficiencies and selling price increases partially offset
by unfavorable currency translation rate changes. Unfavorable
foreign currency translation rate changes decreased segment profit
$13.5 million in the year and
$10.2 million in the quarter. As a
percent to net external sales, segment profit was 9.7% in twelve
months 2014 compared to 8.5% in 2013 and 7.8% in the quarter versus
7.6% last year.
The Latin America Coatings Group's net sales stated in U.S.
dollars decreased 7.3% to $771.4
million in the year and decreased 6.7% to $207.4 million in the quarter due primarily to
unfavorable currency translation rate changes partially offset by
selling price increases. Unfavorable currency translation rate
changes decreased net sales by 12.3% and 13.5% in the year and
quarter, respectively. Stated in U.S. dollars, segment profit in
the year increased to $40.5 million
compared to $38.6 million last year
due primarily to the Brazil tax
assessments incurred in the second and third quarters 2013 and the
2014 selling price increases partially offset by unfavorable
currency translation rate changes. Charges of $31.6 million were recorded for the Brazil tax assessments in the twelve months
2013. Stated in U.S. dollars, segment profit decreased to
$13.0 million in the quarter from
$17.9 million last year due primarily
to unfavorable foreign currency translation rate changes and lower
volume sales partially offset by selling price increases. Foreign
currency translation rate changes reduced segment profit
$15.7 million in the year and
decreased segment profit $4.9 million
in the quarter. As a percent to net external sales, segment profit
was 5.2% in twelve months compared to 4.6% in 2013 and 6.3% in the
quarter versus 8.1% in the fourth quarter last year.
The Company acquired 1.60 million shares of its common stock
through open market purchases in the quarter bringing our total
purchased to 6.93 million shares in the year. The Company had
remaining authorization at December 31, 2014 to purchase 5.23
million shares.
Commenting on the financial results, Christopher M. Connor, Chairman and Chief
Executive Officer, said, "We are pleased to report another year of
record performances in sales, earnings per share, and earnings
before interest, taxes, depreciation and amortization which
surpassed $1.5 billion for the first
time.
"Over the past year, our Paint Stores Group grew architectural
sales volume across every end market segment and delivered strong
operating results. We made great progress during 2014 on the
integration of the U.S. and Canadian Comex stores, which performed
better than expected in 2014. In December, our Consumer Group
announced a new agreement to sell architectural paint under the
HGTV HOME® by Sherwin-Williams brand through Lowe's
stores nationwide. The Global Finishes Group improved segment
profit as a percent to sales through greater operating efficiencies
and good cost control. The Latin America Coatings Group minimized
the impact of declining currency on its core operating margins
through selling price increases and good cost control. Sales in
local currency were positive in both the quarter and full year.
"We continue to generate significant cash from operations
allowing us to invest in the business and return a substantial
portion to our shareholders. In 2014, we generated net operating
cash flow of $1.08 billion. Our
working capital ratio (accounts receivable plus inventories less
accounts payable to sales) at December 31,
2014 was 10.1% compared to 10.5% last year. In 2014, we
added 95 net new stores passing the 4,000 store milestone,
finishing the year with 4,003 stores in operation. During the year,
we continued to buy our stock on the open market and increased our
annual cash dividend 10% to $2.20 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 2015, we anticipate our consolidated
net sales will increase in the mid single digit percentage range
compared to the first quarter of 2014. At that anticipated sales
level, we estimate diluted net income per common share in the first
quarter of 2015 will be in the range of $1.30 to $1.45 per share compared to $1.14 per share earned in the first quarter of
2014. For the full year 2015, we expect consolidated net sales to
increase a high single digit percentage compared to full year 2014.
With annual sales at that level, we have raised our expectation for
diluted net income per common share for 2015 to a range of
$10.90 to $11.10 per share compared
to $8.78 per share earned in
2014."
The Company will conduct a conference call to discuss its
financial results for the fourth quarter and year 2014, and its
outlook for the first quarter and full year 2015, at 2:00 p.m. EST on Thursday, January 29, 2015.
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 January 29th release. The webcast will
also be available at Vcall'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 18, 2015 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
4,000 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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2014
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2013
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2014
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2013
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Net sales
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$
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2,569,412
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$
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2,457,058
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$
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11,129,533
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$
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10,185,532
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Cost of goods
sold
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1,351,437
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1,332,880
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5,965,049
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5,568,966
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Gross
profit
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1,217,975
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1,124,178
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5,164,484
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4,616,566
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Percent to net
sales
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47.4%
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|
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45.8%
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46.4%
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45.3%
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Selling, general and
administrative expenses
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985,329
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962,188
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3,822,966
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3,467,681
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Percent to net
sales
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38.3%
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39.2%
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34.3%
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34.0%
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Other general expense
(income) - net
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25,411
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(2,747)
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37,482
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2,519
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Interest
expense
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15,412
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|
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16,940
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|
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64,205
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|
|
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62,714
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Interest and net
investment income
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(885)
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(879)
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(2,995)
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(3,242)
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Other expense
(income) - net
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3,837
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(552)
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(15,400)
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936
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Income before income
taxes
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188,871
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149,228
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1,258,226
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|
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1,085,958
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Income
taxes
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56,128
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33,105
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392,339
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333,397
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Net income
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$
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132,743
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$
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116,123
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$
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865,887
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$
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752,561
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Net income per common
share:
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Basic
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$
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1.40
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$
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1.16
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$
|
8.95
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|
|
|
$
|
7.41
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Diluted
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$
|
1.37
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$
|
1.14
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$
|
8.78
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|
|
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$
|
7.26
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|
|
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|
|
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Average shares
outstanding - basic
|
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94,527,134
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|
|
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99,503,068
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96,190,101
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100,897,512
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Average shares and
equivalents outstanding - diluted
|
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|
96,441,049
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|
|
|
101,704,955
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|
|
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98,075,435
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|
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103,048,871
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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 29th release.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/the-sherwin-williams-company-reports-2014-year-end-financial-results-300027546.html
SOURCE The Sherwin-Williams Company