8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Act of 1934

Date of Report (Date of earliest event reported):   February 14, 2011

THE VALSPAR CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	1-3011	36-2443580
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)
901 – 3rd Avenue South, Minneapolis, Minnesota		55402
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code:  (612) 851-7000

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (seeGeneral Instruction A.2. below):

☐        Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐        Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐        Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐        Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act  (17 CFR 240.13e-4(c))

Item 2.02.       Results of Operations and Financial Condition.

On February 14, 2011, the Company issued the press release attached as Exhibit 99.1, which sets out the Company's results of operations for the first quarter of fiscal 2011.

Item 9.01        Financial Statements and Exhibits.

(d)           Exhibits

99.1First Quarter Earnings Press Release dated February 14, 2011

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	THE VALSPAR CORPORATION
Dated:   February 14, 2011	/s/Rolf Engh
	Name:  Rolf Engh
	Title:    Secretary

EXHIBIT INDEX

Exhibit No.	Description
99.1	First Quarter Earnings Press Release dated February 14, 2011

EX-99.1

Exhibit 99.1

News Release

  

Media Contact:
Mike Dougherty
612.851.7802
mdougherty@valspar.com Investor Contact:
Tyler Treat
612.851.7358
ttreat@valspar.com

Valspar Reports First-Quarter Results

Company Reaffirms FY 2011 Guidance

Minneapolis, Minn. – February 14, 2011 – The Valspar Corporation (NYSE-VAL) today reported its results for the first-quarter ended January 28, 2011.

First-quarter sales totaled $842.4 million, a 25.3 percent increase from the first quarter of 2010.  First-quarter adjusted net income per share increased to $0.39 in 2011 from $0.36 in 2010.  First-quarter adjusted net income per share in 2011 excludes $0.05 per share in Wattyl acquisition-related charges.  First-quarter adjusted net income per share in 2010 excludes a $0.02 per share charge related to restructuring actions.  Net income for the first quarter was $33.4 million in 2011 and $33.9 million in 2010 and first-quarter reported earnings per share were $0.34 for both years.

“Results for the quarter were in line with our expectations,” said William L. Mansfield, Valspar chairman and chief executive officer. “Our Australian paints acquisition and the continued success of our pricing and new business efforts drove our double-digit top line growth.  Looking ahead, we remain focused on addressing continuing upward pressure on raw material costs through pricing and productivity.  We continue to expect fiscal year 2011 adjusted net income per share in the range of $2.45 to $2.65.”

Mansfield, Gary Hendrickson, president and chief operating officer, and Lori A. Walker, senior vice president and chief financial officer, will conduct a conference call for investors at 10:00 a.m. Central Time (11:00 a.m. Eastern Time) today.  The call can be heard live over the Internet at Valspar’s website at www.valsparglobal.com under Investor Relations.  Those unable to participate during the live broadcast can access an archive of the call on the Valspar website.  A taped delay of the call will also be available from 12:30 p.m. Central Time February 14 through Midnight on February 28 by dialing 1-800-475-6701 from within the U.S. or 320-365-3844 from outside of the U.S., using access code 191625.

The Valspar Corporation (NYSE: VAL) is a global leader in the paint and coatings industry. Since 1806, Valspar has been dedicated to bringing customers the latest innovations, the finest quality and the best customer service in the coatings industry.

FORWARD-LOOKING STATEMENTS   

Certain statements contained in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this report constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. Forward-looking statements are based on management’s current expectations, estimates, assumptions and beliefs about future events, conditions and financial performance. Forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside our control and could cause actual results to differ materially from such statements. Any statement that is not historical in nature is a for ward-looking statement. We may identify forward-looking statements with words and phrases such as “expects,” “projects,” “estimates,” “anticipates,” “believes,” “could,” “may,” “will,” “plans to,” “intend,” “should” and similar expressions.  These risks, uncertainties and other factors include, but are not limited to, deterioration in general economic conditions, both domestic and international, that may adversely affect our business; fluctuations in availability and prices of raw materials, including raw material shortages and other supply chain disruptions, and the inability to pass along or delays in passing along raw material cost increases to our customers; dependence of internal sales and earnings growth on business cycles affecting our customers and growth in the domestic and international coatings industry; market share loss to, and pricing or margin pressure from, larger competitors wit h greater financial resources; significant indebtedness that restricts the use of cash flow from operations for acquisitions and other investments; dependence on acquisitions for growth, and risks related to future acquisitions, including adverse changes in the results of acquired businesses, the assumption of unforeseen liabilities and disruptions resulting from the integration of acquisitions; risks and uncertainties associated with operations and achievement of profitable growth in developing markets, including Asia and Central and South America; loss of business with key customers; damage to our reputation and business resulting from product claims or recalls, litigation, customer perception and other matters; our ability to respond to technology changes and to protect our technology; changes in governmental regulation, including more stringent environmental, health and safety regulations; our reliance on the efforts of vendors, government agencies, utilities and other third parties to achieve adequate c ompliance and avoid disruption of our business; unusual weather conditions adversely affecting sales; changes in accounting policies and standards and taxation requirements such as new tax laws or revised tax law interpretations; the nature, cost and outcome of pending and future litigation and other legal proceedings; and civil unrest and the outbreak of war and other significant national and international events. We undertake no obligation to subsequently revise any forward-looking statement to reflect new information, events or circumstances after the date of such statement.

# # #

THE VALSPAR CORPORATION

COMPARATIVE CONSOLIDATED EARNINGS

For the Quarters Ended January 28, 2011 and January 29, 2010

		First Quarter
(Dollars in thousands, except per share amounts)		(Unaudited)		(Unaudited)
		2011		2010
Net Sales	$	842,404	$	672,363
Cost of Sales		583,491		455,372
Gross Profit		258,913		216,991
Research and Development		27,824		23,665
Selling, General and Administrative		167,701		133,437
Income From Operations		63,388		59,889
Interest Expense		15,559		14,385
Other (Income) Expense, Net		564		(204)
Income Before Income Taxes		47,265		45,708
Income Taxes		13,838		11,771
Net Income	$	33,427	$	33,937
Average Number of Shares O/S - basic		96,859,667		99,133,315
Average Number of Shares O/S - diluted		99,600,414		101,115,945
Net Income per Common Share - basic	$	0.35	$	0.34
Net Income per Common Share - diluted	$	0.34	$	0.34

NON-GAAP FINANCIAL MEASURES

In the accompanying press release, management has reported non-GAAP financial measures - “Adjusted net income per common share – diluted” and “Full Year Guidance for Adjusted Net Income per Common Share - diluted”. Management discloses these measures because we believe the measures may assist investors in comparing our results of operations in the respective periods without regard to the effect on results of (i) after-tax Wattyl acquisition related charges in the 2011 period and (ii) after-tax restructuring charges in the 2010 period.

NON-GAAP RECONCILIATION

The following is a reconciliation of “Net Income Per Common Share - diluted” to “Adjusted Net Income Per Common Share - diluted” for the periods presented:

	First Quarter
	2011		2010
Net Income per Common Share - diluted	$	0.34	$	0.34
Wattyl Acquisition Related Charges		0.05		―
Restructuring Charges		―		0.02
Adjusted Net Income per Common Share - diluted	$	0.39	$	0.36

The following is a reconciliation of “Forecasted Net Income per Common Share - diluted” to our “Full Year Guidance” for the period presented.

	Full Year 2011
Forecasted Net Income per Common Share - diluted	$2.37 - $2.55
Wattyl Acquisition Related Charges	$0.08- $0.10
Full Year Guidance for Adjusted Net Income per Common Share - diluted	$2.45- $2.65

(Dollars in thousands)		January 28, 2011		October 29, 2010		January 29, 2010
Assets		(Unaudited)				(Unaudited)
Current Assets:
Cash and Cash Equivalents	$	168,293	$	167,621	$	129,636
Restricted Cash		12,679		12,574		―
Accounts and Notes Receivable, Net		549,858		628,589		449,485
Inventories		404,777		349,149		247,373
Deferred Income Taxes		50,448		49,069		34,401
Prepaid Expenses and Other		78,154		77,920		79,169
Total Current Assets		1,264,209		1,284,922		940,064
Goodwill		1,361,408		1,355,818		1,337,555
Intangibles, Net		638,452		637,390		628,283
Other Assets		15,645		17,398		4,251
Long Term Deferred Income Taxes		4,703		4,778		5,425
Property, Plant & Equipment, Net		567,375		567,630		459,428
Total Assets	$	3,851,792	$	3,867,936	$	3,375,006
Liabilities and Stockholders’ Equity
Current Liabilities:
Notes Payable and Commercial Paper	$	166,544	$	8,088	$	6,278
Trade Accounts Payable		425,757		447,303		285,983
Income Taxes		27,639		33,331		10,641
Other Accrued Liabilities		300,725		396,129		274,816
Total Current Liabilities		920,665		884,851		577,718
Long Term Debt, Net of Current Portion		949,795		943,216		873,278
Deferred Income Taxes		257,322		256,525		239,766
Other Long Term Liabilities		154,268		152,979		170,686
Total Liabilities		2,282,050		2,237,571		1,861,448
Stockholders’ Equity		1,569,742		1,630,365		1,513,558
Total Liabilities and Stockholders’ Equity	$	3,851,792	$	3,867,936	$	3,375,006

The Valspar Corporation

Other Financial Data

Dollars in thousands

	Quarter 1
	2011		2010
I.  Comparison year over year
Gross Margin, as a percentage of net sales *
Gross Margin, reported	30.7%		32.3%
Gross Margin, adjusted for cost of restructuring and Wattyl acquisition related charges	31.7%		32.9%
Operating Expense as a percentage of net sales *
Operating Expense, reported	23.2%		23.4%
Operating Profit, as a percentage of net sales *
Operating Profit, reported	7.5%		8.9%
Operating Profit, adjusted for cost of restructuring and Wattyl acquisition related charges	8.5%		9.5%
	Quarter 1
II.Segment Data	2011		2010
Sales
Coatings	456,389		391,321
Paint	335,951		233,413
All Other less intersegment sales	50,064		47,629
Total	842,404		672,363
Earnings Before Interest and Taxes (EBIT) *
Coatings	50,825		42,955
Paint	19,513		27,832
All Other	(7,514	)	(10,694	)
Total	62,824		60,093
Earnings Before Interest and Taxes (EBIT) *, adjusted for cost of restructuring and Wattyl acquisition related charges
Coatings	51,821		45,511
Paint	26,420		29,097
All Other	(7,514	)	(10,514	)
Total	70,727		64,094

* Certain amounts in prior years’ financial statements have been reclassified to conform with the 2010 presentation.