The SherwinWilliams Company (SHW, Financial) filed Quarterly Report for the period ended 2009-03-31.
Sherwin-Williams Co. is a manufacturer distributor and retailer of paint coatings and related products. It is the one of largest paint companies in the United States and in the world. Well known brands include Sherwin- Williams Dutch Boy Pratt & Lambert Martin-Senour Thompson's Minwax and Krylon. (Company Press Release) The SherwinWilliams Company has a market cap of $6.74 billion; its shares were traded at around $57.41 with a P/E ratio of 14.8 and P/S ratio of 0.8. The dividend yield of The SherwinWilliams Company stocks is 2.5%. The SherwinWilliams Company had an annual average earning growth of 9.7% over the past 10 years. GuruFocus rated The SherwinWilliams Company the business predictability rank of 2.5-star.
Results of operations for the Company in the first quarter of 2009 continued to suffer from a decrease in end-market demand for coatings and other building materials caused by the effects of the expanding global economic downturn and a lingering soft U.S. housing market. Consolidated net sales decreased 13.0 percent in the first quarter to $1.551 billion from $1.782 billion in the first quarter of 2008 due primarily to paint sales volume declines resulting from contracted demand in the domestic market for more than two years that expanded into the global markets beginning in the second half of 2008. Net sales in the Paint Stores Group decreased 12.9 percent in the quarter to $898.4 million due primarily to weak paint sales volume that was partially offset by selling price increases initiated during the second half of 2008. Net sales in the Paint Stores Group from stores open more than twelve calendar months decreased 12.7 percent. Net sales in the Consumer Group increased 0.4 percent to $288.2 million due primarily to additional sales to existing discount customers related to new products. Net sales in the Global Finishes Group declined 21.5 percent in the quarter to $362.5 million when stated in U.S. dollars due primarily to decreased paint volume sales and unfavorable currency translation rates partially offset by acquisitions and selling price increases. Gross profit as a percent of consolidated net sales increased to 43.9 percent from 43.8 percent in 2008 due primarily to stabilizing raw material costs and higher selling prices since last years first quarter primarily offset by higher conversion costs and lower fixed cost absorption relating to lower manufacturing volume. Selling, general and administrative expenses (SG&A) increased as a percent of consolidated net sales to 39.3 percent from 36.6 percent in the first quarter of 2008. The SG&A percentage increase was due primarily to the sales decline as good expense control across all Reportable Operating Segments resulted in total SG&A spending that was $42.9 million lower than in the first quarter of 2008. Other general expense net increased $10.3 million due primarily to increased accruals for environmental-related matters and exit costs related to closed properties. Interest expense decreased $5.5 million in 2009 due to lower short-term borrowings and borrowing rates. The effective income tax rate for first quarter 2009 was 26.7 percent compared to 31.0 percent in
Company has sufficient total available borrowing capacity to fund its current operating needs. Short-term borrowings increased $248.7 million from December 31, 2008, due to the seasonal increase in need for working capital, and all other current liabilities decreased $223.3 million. Since March 31, 2008, Accounts receivable and Inventories were down $260.5 million and the remaining current assets decreased $26.5 million. Accounts Receivable and Inventories increased only $9.7 million from December 31, 2008 to March 31, 2009 when normal seasonal trends typically require significant growth in these categories. The use of a portion of Net operating cash to reduce Total current liabilities more than Total current assets improved the Companys current ratio to .97 at March 31, 2009 from .89 at March 31, 2008 and compared to .99 at December 31, 2008. Total debt at March 31, 2009 decreased $270.3 million to $1,077.9 million from $1,348.2 million at March 31, 2008 and decreased as a percentage of total capitalization to 40.5 percent from 45.4 percent at the end of the first quarter last year. Total debt increased $244.1 million and increased from 34.2% of total capitalization versus December 31, 2008. At March 31, 2009, the Company had remaining borrowing ability of $1.26 billion. Net operating cash declined $51.7 million to a cash usage in the first quarter of 2009 of $112.2 million from a usage of $60.5 million in 2008 primarily due to decrease of $40.7 million in net income and a seasonal net increase in cash used of $29.0 million to fund working capital requirements. In the twelve month period from April 1, 2008 through March 31, 2009, the Company invested $66.3 million in acquisitions and $99.8 million in capital additions and improvements, reduced its total debt $260.9 million, purchased $195.7 million in treasury stock, and paid $164.7 million in cash dividends to its shareholders of common stock.
Goodwill and intangible assets increased $2.0 million from December 31, 2008 and decreased $45.8 million from March 31, 2008. The net increase during the first quarter of 2009 was due to acquisitions of $8.6 million partially offset by amortization and currency translation rate changes of $6.6 million. The net decrease over the twelve-month period from March 31, 2008 resulted from acquisitions and capitalization of software costs of $55 million that were more than offset by impairments of $54.6 million, amortization of $23.2 million and other adjustments, primarily disposition and currency translation rate changes of $22.3 million. See Note 3, on pages 50 to 52, in the Companys Annual Report on Form 10-K for the year ended December 31, 2008, for more information concerning goodwill and intangible assets.
Net property, plant and equipment decreased $11.7 million in the first quarter 2009 and decreased $59.3 million in the twelve months since March 31, 2008. The reduction in the first quarter of 2009 was primarily due to capital expenditures of $22.4 million and acquired assets of $4.4 million that were more than offset by depreciation expense of $35.9 million and the disposition of assets with remaining book value. Since March 31, 2008, capital expenditures of $99.8 million and acquired assets of $18.6 million were more than offset by depreciation expense of $143.3 million and dispositions of assets with remaining net book value. Capital expenditures during the first three months of 2009 primarily represented expenditures associated with improvements and normal equipment replacement in manufacturing and distribution facilities in the Consumer Group, new store openings and normal equipment replacement in the Paint Stores Group and normal equipment replacement in the Global Finishes Group.
Short-term borrowings increased $248.7 million to $765.1 million at March 31, 2009 from $516.4 million at December 31, 2008. Total long-term debt decreased $4.6 million to $312.7 at March 31, 2009 from $317.3 million at December 31, 2008. See the Financial Condition, Liquidity and Cash Flow section of this report for more information. There have been no other significant changes to the Companys contractual obligations and commercial commitments in
Read the The complete ReportSHW is in the portfolios of Andreas Halvorsen of Viking Global Investors LP, Dodge & Cox, Tweedy Browne of Tweedy Browne CO LLC, David Dreman of Dreman Value Management, Ruane Cunniff of Ruane & Cunniff & Goldfarb Inc.
Sherwin-Williams Co. is a manufacturer distributor and retailer of paint coatings and related products. It is the one of largest paint companies in the United States and in the world. Well known brands include Sherwin- Williams Dutch Boy Pratt & Lambert Martin-Senour Thompson's Minwax and Krylon. (Company Press Release) The SherwinWilliams Company has a market cap of $6.74 billion; its shares were traded at around $57.41 with a P/E ratio of 14.8 and P/S ratio of 0.8. The dividend yield of The SherwinWilliams Company stocks is 2.5%. The SherwinWilliams Company had an annual average earning growth of 9.7% over the past 10 years. GuruFocus rated The SherwinWilliams Company the business predictability rank of 2.5-star.
Highlight of Business Operations:
increase in need for working capital, and all other current liabilities decreased $223.3 million. Since March 31, 2008, Accounts receivable and Inventories were down $260.5 million and the remaining current assets decreased $26.5 million. Accounts Receivable and Inventories increased only $9.7 million from December 31, 2008 to March 31, 2009 when normal seasonal trends typically require significant growth in these categories. The use of a portion of Net operating cash to reduce Total current liabilities more than Total current assets improved the Companys current ratio to .97 at March 31, 2009 from .89 at March 31, 2008 and compared to .99 at December 31, 2008. Total debt at March 31, 2009 decreased $270.3 million to $1,077.9 million from $1,348.2 million at March 31, 2008 and decreased as a percentage of total capitalization to 40.5 percent from 45.4 percent at the end of the first quarter last year. Total debt increased $244.1 million and increased from 34.2% of total capitalization versus December 31, 2008. At March 31, 2009, the Company had remaining borrowing ability of $1.26 billion. Net operating cash declined $51.7 million to a cash usage in the first quarter of 2009 of $112.2 million from a usage of $60.5 million in 2008 primarily due to decrease of $40.7 million in net income and a seasonal net increase in cash used of $29.0 million to fund working capital requirements. In the twelve month period from April 1, 2008 through March 31, 2009, the Company invested $66.3 million in acquisitions and $99.8 million in capital additions and improvements, reduced its total debt $260.9 million, purchased $195.7 million in treasury stock, and paid $164.7 million in cash dividends to its shareholders of common stock.Results of operations for the Company in the first quarter of 2009 continued to suffer from a decrease in end-market demand for coatings and other building materials caused by the effects of the expanding global economic downturn and a lingering soft U.S. housing market. Consolidated net sales decreased 13.0 percent in the first quarter to $1.551 billion from $1.782 billion in the first quarter of 2008 due primarily to paint sales volume declines resulting from contracted demand in the domestic market for more than two years that expanded into the global markets beginning in the second half of 2008. Net sales in the Paint Stores Group decreased 12.9 percent in the quarter to $898.4 million due primarily to weak paint sales volume that was partially offset by selling price increases initiated during the second half of 2008. Net sales in the Paint Stores Group from stores open more than twelve calendar months decreased 12.7 percent. Net sales in the Consumer Group increased 0.4 percent to $288.2 million due primarily to additional sales to existing discount customers related to new products. Net sales in the Global Finishes Group declined 21.5 percent in the quarter to $362.5 million when stated in U.S. dollars due primarily to decreased paint volume sales and unfavorable currency translation rates partially offset by acquisitions and selling price increases. Gross profit as a percent of consolidated net sales increased to 43.9 percent from 43.8 percent in 2008 due primarily to stabilizing raw material costs and higher selling prices since last years first quarter primarily offset by higher conversion costs and lower fixed cost absorption relating to lower manufacturing volume. Selling, general and administrative expenses (SG&A) increased as a percent of consolidated net sales to 39.3 percent from 36.6 percent in the first quarter of 2008. The SG&A percentage increase was due primarily to the sales decline as good expense control across all Reportable Operating Segments resulted in total SG&A spending that was $42.9 million lower than in the first quarter of 2008. Other general expense net increased $10.3 million due primarily to increased accruals for environmental-related matters and exit costs related to closed properties. Interest expense decreased $5.5 million in 2009 due to lower short-term borrowings and borrowing rates. The effective income tax rate for first quarter 2009 was 26.7 percent compared to 31.0 percent in
Company has sufficient total available borrowing capacity to fund its current operating needs. Short-term borrowings increased $248.7 million from December 31, 2008, due to the seasonal increase in need for working capital, and all other current liabilities decreased $223.3 million. Since March 31, 2008, Accounts receivable and Inventories were down $260.5 million and the remaining current assets decreased $26.5 million. Accounts Receivable and Inventories increased only $9.7 million from December 31, 2008 to March 31, 2009 when normal seasonal trends typically require significant growth in these categories. The use of a portion of Net operating cash to reduce Total current liabilities more than Total current assets improved the Companys current ratio to .97 at March 31, 2009 from .89 at March 31, 2008 and compared to .99 at December 31, 2008. Total debt at March 31, 2009 decreased $270.3 million to $1,077.9 million from $1,348.2 million at March 31, 2008 and decreased as a percentage of total capitalization to 40.5 percent from 45.4 percent at the end of the first quarter last year. Total debt increased $244.1 million and increased from 34.2% of total capitalization versus December 31, 2008. At March 31, 2009, the Company had remaining borrowing ability of $1.26 billion. Net operating cash declined $51.7 million to a cash usage in the first quarter of 2009 of $112.2 million from a usage of $60.5 million in 2008 primarily due to decrease of $40.7 million in net income and a seasonal net increase in cash used of $29.0 million to fund working capital requirements. In the twelve month period from April 1, 2008 through March 31, 2009, the Company invested $66.3 million in acquisitions and $99.8 million in capital additions and improvements, reduced its total debt $260.9 million, purchased $195.7 million in treasury stock, and paid $164.7 million in cash dividends to its shareholders of common stock.
Goodwill and intangible assets increased $2.0 million from December 31, 2008 and decreased $45.8 million from March 31, 2008. The net increase during the first quarter of 2009 was due to acquisitions of $8.6 million partially offset by amortization and currency translation rate changes of $6.6 million. The net decrease over the twelve-month period from March 31, 2008 resulted from acquisitions and capitalization of software costs of $55 million that were more than offset by impairments of $54.6 million, amortization of $23.2 million and other adjustments, primarily disposition and currency translation rate changes of $22.3 million. See Note 3, on pages 50 to 52, in the Companys Annual Report on Form 10-K for the year ended December 31, 2008, for more information concerning goodwill and intangible assets.
Net property, plant and equipment decreased $11.7 million in the first quarter 2009 and decreased $59.3 million in the twelve months since March 31, 2008. The reduction in the first quarter of 2009 was primarily due to capital expenditures of $22.4 million and acquired assets of $4.4 million that were more than offset by depreciation expense of $35.9 million and the disposition of assets with remaining book value. Since March 31, 2008, capital expenditures of $99.8 million and acquired assets of $18.6 million were more than offset by depreciation expense of $143.3 million and dispositions of assets with remaining net book value. Capital expenditures during the first three months of 2009 primarily represented expenditures associated with improvements and normal equipment replacement in manufacturing and distribution facilities in the Consumer Group, new store openings and normal equipment replacement in the Paint Stores Group and normal equipment replacement in the Global Finishes Group.
Short-term borrowings increased $248.7 million to $765.1 million at March 31, 2009 from $516.4 million at December 31, 2008. Total long-term debt decreased $4.6 million to $312.7 at March 31, 2009 from $317.3 million at December 31, 2008. See the Financial Condition, Liquidity and Cash Flow section of this report for more information. There have been no other significant changes to the Companys contractual obligations and commercial commitments in
Read the The complete ReportSHW is in the portfolios of Andreas Halvorsen of Viking Global Investors LP, Dodge & Cox, Tweedy Browne of Tweedy Browne CO LLC, David Dreman of Dreman Value Management, Ruane Cunniff of Ruane & Cunniff & Goldfarb Inc.
