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): May 14, 2007

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.)

1101 Third Street South, Minneapolis, Minnesota	55415
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (612) 332-7371

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):

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

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

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

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

Item 2.02Results of Operations and Financial Condition.

On May 14, 2007, the Company issued the press release attached as Exhibit 99.1, which sets out the Company’s results of operations for the second quarter of fiscal 2007.

Item 9.01Financial Statements and Exhibits.

(d) Exhibits

99.1 Second Quarter Earnings Press Release dated May 14, 2007

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:  May 14, 2007	/s/ Rolf Engh
	Name:	Rolf Engh
	Title:	Secretary

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

VALSPAR REPORTS SECOND QUARTER RESULTS

MINNEAPOLIS, May 14, 2007 – The Valspar Corporation (NYSE-VAL) today reported its results for the second-quarter ended April 27, 2007.

Second quarter sales totaled $808.5 million, a 5.4 percent increase from the second quarter of 2006. Net income for the second quarter was $41.5 million. Adjusted earnings per share were $0.40 for the quarter, which excludes a non-cash adjustment of $0.05 per share for Huarun minority interest shares. Reported earnings per share were $0.35. In 2006, second-quarter earnings were $47.9 million, or $0.46 per share, which included a $0.01 per share charge for manufacturing rationalization.

Sales for the first six months of fiscal 2007 were $1,503.0 million, up 7.6 percent from the same period a year ago. Net income for the first half was $65.1 million. Adjusted earnings per share for the first half were $0.63, excluding a $0.10 per share non-cash adjustment for the Huarun minority interest shares. Reported earnings per share for the first half were $0.53. First-half 2006 net income was $70.5 million, or $0.69 per share, which included a $0.02 per share charge for manufacturing rationalization. The company continues to expect fiscal year 2007 adjusted earnings per share to be at the low end of the $1.80-$1.90 range. This guidance excludes an estimated $0.18 per share non-cash adjustment for the minority interest shares.

“Results for the quarter were right in line with our expectations,” said William L. Mansfield, Valspar president and chief executive officer. “We are successfully managing through the current challenges in our architectural paints and wood coatings businesses and remain confident that we will deliver on our second-half expectations.”

“Our long-term growth agenda is advancing,” Mansfield continued. “Our global expansion, acquisition and productivity improvement initiatives are delivering solid results and our investment in building the Valspar brand is off to a strong start.”

William L. Mansfield and Lori A. Walker, vice president, treasurer and controller, 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 1:30 p.m. Central Time May 14 through Midnight on May 28 by dialing 1-800-475-6701 from with in the U.S. or 320-365-3844 from outside of the U.S., using access code 872599.

Investor Contact: Lori A. Walker, (612) 375-7350

Media Contact: Mike Dougherty, (612) 375-7802

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.

For more information, visit www.valsparglobal.com.

This press release contains certain “forward-looking” statements. These forward-looking statements are based on management’s expectations and beliefs concerning future events. 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. These uncertainties and other factors include, but are not limited to, dependence of internal earnings growth on economic conditions and growth in the domestic and international coatings industry; risks related to any future acquisitions, including risks of adverse changes in the results of acquired businesses and the assumption of unforeseen liabilities; risks of disruptions in business resulting from the integration process and higher interest costs resulting from further borrowing for any such acquisitions; our reliance on the efforts of vendors, government agencies, utilities and other third parties to achieve adequate compliance and avoid disruption of our business; risks of disruptions in business resulting from the Company’s relationships with customers and suppliers; unusual weather conditions adversely affecting sales; changes in raw materials pricing and availability; delays in passing along cost increases to customers; changes in governmental regulation, including more stringent environmental, health and safety regulations; the nature, cost and outcome of pending and future litigation and other legal proceedings; the outbreak of war and other significant national and international events; and other risks and uncertainties. The foregoing list is not exhaustive, and the Company disclaims any obligation to subsequently revise any forward-looking statements to reflect events or circumstances after the date of such statements.

# # #

THE VALSPAR CORPORATION

COMPARATIVE CONSOLIDATED EARNINGS

For the Quarters Ended April 27, 2007 and April 28, 2006

	Second Quarter					Year-To-Date
(Dollars in thousands, except per share amounts)	(Unaudited)			(Unaudited)		(Unaudited)			(Unaudited)
	2007			2006		2007			2006
Net Sales	$	808,471		$	766,816	$	1,502,994		$	1,396,581
Cost of Sales		561,590			534,708		1,057,029			983,997
Operating Expenses		168,662			147,600		316,527			281,539
Income From Operations		78,219			84,508		129,438			131,045
Interest Expense		16,238			10,930		30,929			21,710
Other (Income) Expense, Net		(382	)		346		2,044			1,155
Income Before Income Taxes		62,363			73,232		96,465			108,180
Income Taxes		20,847			25,297		31,351			37,704
Net Income	$	41,516		$	47,935	$	65,114		$	70,476
Mandatorily Redeemable Stock Accrual (1)		(5,067	)		—		(10,134	)		—
Net Income Available to Common Shareholders		36,449			47,935		54,980			70,476
Average Number of Shares O/S - basic		101,672,432			101,344,587		101,717,101			100,924,295
Average Number of Shares O/S - diluted		103,371,264			103,116,052		103,453,373			102,487,907
Net Income per Common Share - basic	$	0.36		$	0.47	$	0.54		$	0.70
Net Income per Common Share - diluted	$	0.35		$	0.46	$	0.53		$	0.69

(1) MANDATORILY REDEEMABLE STOCK ACCRUAL REDUCED BASIC AND DILUTED NET INCOME PER SHARE $0.05 IN THE SECOND QUARTER OF 2007 AND $0.10 YEAR TO DATE IN 2007.

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" - which exclude a non-cash accrual relating to Mandatorily Redeemable Stock in connection with the Company's acquisition of the share capital of Huarun Paints Holding Company Limited. Management discloses these measures because it believes these measures may assist investors in comparing the Company's results of operations in the respective periods without regard to the effect on the results in the 2007 period of the non-cash accrual relating to the Huarun acquisition.

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:

	Second Quarter				Year-To-Date
	2007		2006		2007		2006
Net Income per Common Share - diluted	$	0.35	$	0.46	$	0.53	$	0.69
Mandatorily Redeemable Stock Accrual	$	0.05	$	—	$	0.10	$	—
Adjusted Net Income per Common Share - diluted	$	0.40	$	0.46	$	0.63	$	0.69

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)	April 27, 2007		October 27, 2006		April 28, 2006
Assets	(Unaudited)				(Unaudited)
Current Assets:
Cash and Cash Equivalents	$	61,424	$	88,238	$	58,359
Accounts Receivable, Net		549,434		475,736		516,032
Inventories		289,919		281,817		251,632
Other		129,127		122,526		110,366
Total Current Assets		1,029,904		968,317		936,389
Goodwill, Net		1,423,307		1,336,098		1,064,856
Other Assets, Net		430,250		427,515		376,421
Property, Plant & Equipment, Net		480,486		459,605		417,515
Total Assets	$	3,363,947	$	3,191,535	$	2,795,181
Liabilities and Stockholders’ Equity
Current Liabilities:
Notes Payable to Banks	$	485,569	$	489,163	$	12,754
Trade Accounts Payable		342,024		368,159		302,139
Income Taxes		36,077		38,455		50,429
Accrued Liabilities		239,633		301,100		253,836
Total Current Liabilities		1,103,303		1,196,877		619,158
Long Term Debt		620,862		350,267		698,148
Deferred Liabilities		361,545		385,605		338,478
Mandatorily Redeemable Stock		28,857		18,723		—
Stockholders’ Equity		1,249,380		1,240,063		1,139,397
Total Liabilities and Stockholders’ Equity	$	3,363,947	$	3,191,535	$	2,795,181

The Valspar Corporation

Other Financial Data

Dollars in millions, except per share amounts

	Quarter 2						YTD
	2007			2006			2007			2006
I. Comparison year over year
Earnings Per Share
Diluted EPS, reported	$	0.35		$	0.46		$	0.53		$	0.69
Adjustments Per Share, net of tax:
Manufacturing Rationalization, net	$	—		$	0.01		$	—		$	0.02
Favorable tax adjustments	$	—		$	—		$	0.01		$	—
Mandatorily redeemable stock accrual	$	0.05		$	—		$	0.10		$	—
Gross Margin, as a percentage of net sales
Gross Margin, reported		30.5	%		30.3	%		29.7	%		29.5	%
Gross Margin, adjusted for net cost of manufacturing rationalization		30.5	%		30.6	%		29.7	%		29.9	%
Operating Profit, as a percentage of net sales
Operating Profit, reported		9.7	%		11.0	%		8.6	%		9.4	%
Operating Profit, adjusted for net cost of manufacturing rationalization		9.7	%		11.3	%		8.6	%		9.7	%
	Quarter 2						YTD
II. Segment Data	2007			2006			2007			2006
Sales
Paint	$	273.8		$	260.9		$	493.5		$	448.6
Coatings	$	453.3		$	422.0		$	865.6		$	803.0
All Other less intersegment sales	$	81.4		$	83.9		$	143.9		$	145.0
Total	$	808.5		$	766.8		$	1,503.0		$	1,396.6
Earnings Before Interest and Taxes (EBIT) *
Paint	$	30.3		$	31.5		$	50.0		$	38.7
Coatings	$	45.6		$	51.6		$	80.2		$	92.8
All Other	$	2.7		$	1.1		$	(2.8	)	$	(1.6	)
Total	$	78.6		$	84.2		$	127.4		$	129.9

* Certain amounts in prior years’ financial statements have been reclassified to conform with the 2007 presentation.