SECURITIES AND EXCHANGE COMMISSION
Washington, DC
20549
FORM 10-Q/A
AMENDMENT NO. 1
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Three Months Commission File
Ended January 30, 1998 Number: 1-3011
THE VALSPAR CORPORATION
State of Incorporation: IRS Employer ID No.:
Delaware 36-2443580
Principal Executive Offices:
1101 Third Street South
Minneapolis, MN 55415
Telephone Number: 612/332-7371
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
THE VALSPAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
January 30, January 24, October 31,
1998 1997 1997
---------- ---------- ----------
(Unaudited) (Unaudited) (Note)
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 11,448 $ 10,243 $ 11,113
Accounts receivable less allowance
(1/30/98-$1,453; 1/24/97-$1,367;
10/31/97-$1,364) 170,961 131,148 183,593
Inventories:
Manufactured products 90,809 66,467 81,720
Raw materials, supplies and work-in-
process 39,887 28,380 37,933
---------- ---------- ----------
130,696 94,847 119,653
Other current assets 45,705 33,771 42,488
---------- ---------- ----------
TOTAL CURRENT ASSETS 358,810 270,009 356,847
OTHER ASSETS 89,797 58,747 72,875
PROPERTY, PLANT AND EQUIPMENT 362,367 308,811 351,847
Less allowance for depreciation (172,350) (153,893) (166,099)
---------- ---------- ----------
190,017 154,918 185,748
---------- ---------- ----------
$ 638,624 $ 483,674 $ 615,470
========== ========== ==========
</TABLE>
Note: The Balance Sheet at October 31, 1997 has been derived from the audited
financial statements at that date.
See Notes to Condensed Consolidated Financial Statements.
<PAGE>
THE VALSPAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS - CONTINUED
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
January 30, January 24, October 31,
1998 1997 1997
---------- ---------- ----------
(Unaudited) (Unaudited) (Note)
<S> <C> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable to banks $ 106,118 $ 33,000 $ 71,720
Trade accounts payable 93,257 74,973 96,676
Income taxes 6,069 7,599 1,083
Accrued liabilities 73,204 58,423 89,660
Current portion of long-term debt 291 274 281
---------- ---------- ----------
TOTAL CURRENT LIABILITIES 278,939 174,269 259,420
LONG-TERM DEBT 31,658 30,727 35,844
DEFERRED LIABILITIES 24,974 21,414 25,141
STOCKHOLDERS' EQUITY:
Common Stock (Par Value-$.50;
Authorized 120,000,000 shares;
Shares issued, including shares in
treasury--53,321,312) 26,660 13,330 26,660
Additional paid-in capital 23,158 16,384 17,758
Retained earnings 317,491 280,667 313,485
Other (1,856) 541 (1,850)
---------- ---------- ----------
365,453 310,922 356,053
Less cost of Common Stock in treasury
(1/30/98-9,489,650 shares; 1/24/97-
9,418,894 shares; 10/31/97-9,642,341
shares) 62,400 53,658 60,988
---------- ---------- ----------
303,053 257,264 295,065
---------- ---------- ----------
$ 638,624 $ 483,674 $ 615,470
========== ========== ==========
</TABLE>
Note: The Balance Sheet at October 31, 1997 has been derived from the audited
financial statements at that date.
See Notes to Condensed Consolidated Financial Statements
<PAGE>
THE VALSPAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED
--------------------------
January 30, January 24,
1998 1997
----------- -----------
Net sales $ 225,359 $ 189,288
Costs and expenses:
Cost of sales 161,645 135,850
Research and development 9,258 8,229
Selling and administration 38,406 31,839
Interest expense 1,885 607
Other income - net 660 499
----------- -----------
Income before income taxes 14,825 13,262
Income taxes 5,930 5,334
----------- -----------
Net income $ 8,895 $ 7,928
=========== ===========
Net income per common share - basic and
diluted $ 0.20 $ 0.18
=========== ===========
Average number of common shares
outstanding - basic 43,403,943 43,528,200
- diluted 44,152,204 44,228,618
Dividends paid per common share $ 0.105 $ 0.090
See Notes to Condensed Consolidated Financial Statements.
<PAGE>
THE VALSPAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
-------------------------
January 30, January 24,
1998 1997
---------- ----------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 8,895 $ 7,928
Adjustments to reconcile net income to net cash provided
by/(used in) operating activities:
Depreciation and amortization 7,295 6,323
Increase (decrease) in cash due to changes in net
operating assets, net of effects of acquired businesses:
Accounts and notes receivable 12,934 21,694
Inventories and other assets (18,728) (12,791)
Trade accounts payable and accrued liabilities (13,371) (19,727)
Income taxes payable 4,986 (524)
Other deferred liabilities 35 (65)
Other (2,852) (597)
---------- ----------
Net Cash Provided By/(Used In) Operating Activities (806) 2,241
INVESTING ACTIVITIES:
Purchases of property, plant and equipment (10,510) (6,809)
Acquired businesses/assets, net of cash (2,686) (6,456)
Other investments/advances to joint ventures (11,025) 5,068
---------- ----------
Net Cash Used In Investing Activities (24,221) (8,197)
FINANCING ACTIVITIES:
Net proceeds from borrowings 30,193 17,142
Proceeds from sale of treasury stock 439 759
Purchase of shares of Common Stock for treasury (373) (4,874)
Dividends paid (4,897) (3,940)
---------- ----------
Net Cash Provided By Financing Activities 25,362 9,087
Increase In Cash and Cash Equivalents 335 3,131
Cash and Cash Equivalents at Beginning of Period 11,113 7,112
---------- ----------
Cash and Cash Equivalents at End of Period $ 11,448 $ 10,243
========== ==========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
<PAGE>
THE VALSPAR CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
FOR THE THREE MONTHS ENDED JANUARY 30, 1998
NOTE 1: The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the three months ended
January 30, 1998 are not necessarily indicative of the results that may be
expected for the year ended October 30, 1998. For further information refer to
the consolidated financial statements and footnotes thereto included in The
Valspar Corporation's annual report on Form 10-K for the year ended October 31,
1997.
NOTE 2: In the first quarter of 1998, the Company adopted Statement of Financial
Accounting Standard No. 128, "Earnings per Share". Under the new requirements
for calculating basic earnings per share, the dilutive effect of stock options
is excluded. Diluted earnings per share is based on the weighted average number
of Common Shares outstanding during each period plus common stock equivalents on
stock options. The potential dilution from the exercise of stock options was not
material for the first quarter of 1997 or 1998.
NOTE 3: Trade accounts payable include $13.2 million at January 30, 1998 and
$15.1 million at January 24, 1997 of issued checks which had not cleared the
Company's bank accounts.
NOTE 4: Effective December 1, 1997, the Company completed it's purchase of a 49%
interest in Valspar Coates (South Africa) (Proprietary) Limited, a joint venture
company formed with Coates Brothers (South Africa) Limited to operate the can
coatings and metal decorating inks business in South Africa. The transaction is
being accounted for as an equity investment. The transaction was not material to
the results of operations reported for the period ended January 30, 1998.
The Acquisition Agreement between the Company and Coates Brothers plc calls for
the purchase of certain other Coates operations in subsequent phases over a
period of up to five years. The additional phases of the transaction are subject
to various conditions and regulatory approvals.
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K:
(a) Exhibit 27 - Restated Financial Data Schedule (submitted in
electronic format for use of Commission only).
(b) The registrant did not file any reports on Form 8-K during the
three months ended January 30, 1998.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and 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
Date: April 15, 1998 By /s/ R. Engh
----------------------------
R. Engh
Secretary
<TABLE> <S> <C>
<ARTICLE> 5
<RESTATED>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> OCT-30-1998 OCT-31-1997
<PERIOD-END> JAN-30-1998 JAN-24-1997
<CASH> 11,448 10,243
<SECURITIES> 0 0
<RECEIVABLES> 172,414 132,515
<ALLOWANCES> (1,453) (1,367)
<INVENTORY> 130,696 94,847
<CURRENT-ASSETS> 358,810 270,009
<PP&E> 362,367 308,811
<DEPRECIATION> (172,350) (153,893)
<TOTAL-ASSETS> 638,624 483,674
<CURRENT-LIABILITIES> 278,939 174,269
<BONDS> 0 0
0 0
0 0
<COMMON> 26,660 13,330
<OTHER-SE> (1,856) 541
<TOTAL-LIABILITY-AND-EQUITY> 638,624 483,674
<SALES> 225,359 189,288
<TOTAL-REVENUES> 225,359 189,288
<CGS> 161,645 135,850
<TOTAL-COSTS> 47,664 40,068
<OTHER-EXPENSES> (660) (499)
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 1,885 607
<INCOME-PRETAX> 14,825 13,262
<INCOME-TAX> 5,930 5,334
<INCOME-CONTINUING> 8,895 7,928
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 8,895 7,928
<EPS-PRIMARY> 0.20 0.18
<EPS-DILUTED> 0.20 0.18
</TABLE>
