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$SHW 1Q15 10-Q: Net operating cash was use of $55.07MM vs. use of $83.12MM in 1Q14. Net investing cash was use of $36.28MM vs. use of $45.069MM. Net financing cash was gain of $111.14MM vs. use of $254.31MM in 1Q14. Sequentially, cash and cash equivalents increased $23.28MM at 1Q15-end.
In the wake of hurricanes, $SHW revisited its 3Q17 guidance and it’s expecting diluted net income per share to be in the range of $3.40 to $3.70 per share compared to earlier forecast of $3.70 to $4.10 per share and $4.08 per share earned in 3Q16. The expected incremental sales from the Valspar acquisition remain unchanged at approx. $1Bil.
$SHW expects 3Q17 core net sales to increase a low to mid single digit percentage compared to last year. The company predicts 3Q17 EPS of $3.70-4.10, including a $1.10 charge from costs associated with the Valspar acquisition, and includes an EPS increase of $0.40-0.60 from Valspar operations.
$SHW's net sales in the Consumer Brands Group for 2Q17 grew 16% from last year, due primarily to the inclusion of Valspar sales for the month of June. The Performance Coatings Group's net sales climbed 48% due primarily to one month of Valspar sales, higher paint sales volume and selling price increases.
$SHW's net sales in the Americas Group for 2Q17 increased 8.7% from last year. This was due primarily to higher architectural paint sales volume across most end market segments, the impact of the change in revenue classification and selling price increases.
$SHW's net sales for 2Q17 increased 16% from last year. This was due primarily to the addition of Valspar sales for the month of June and higher paint sales volume in The Americas Group and the Performance Coatings Group. The change in revenue classification increased sales 2.2%.
$SHW reported a drop in 2Q17 earnings due to charge related to the divestiture of the Valspar North American Industrial Wood Coatings business and acquisition-related costs. Net income fell to $319.11MM or $3.36 per share from $378.06MM or $3.99 per share last year. Net sales grew to $3.74Bil from $3.22Bil.
$SHW completed the acquisition of Valspar Corp, creating a market leader in paint and coatings. $VAL shareholders will receive $113 per share in cash. Following the deal, Valspar common stock ceased trading and will be delisted from the NYSE. $SHW expects the transaction to be immediately accretive to earnings and to raise its operating cash flow.
$SHW said it completed divestiture of the assets related to the North American Industrial Wood Coatings business of $VAL to $AXTA for $420MM in cash. Sherwin-Williams divested the unit following regulatory reviews, by the United States Federal Trade Commission and the Canadian Competition Bureau, of the company’s acquisition of Valspar Corp.
$VAL's BoD declared a quarterly dividend of $0.37 per share on its common stock. The dividend is payable on June 8, 2017, to shareholders of record as of the close of business on June 1, 2017. If the earlier announced merger of $VAL with a subsidiary of $SHW becomes effective on June 1, 2017, the dividend will not be paid.
$SHW has increased the pricing within its Paint Stores Group, which has offset the raw material inflation in 1Q17. Last time, the company went on with price increase was at 1Q14. The company said that the rate of effectiveness of the price increase is ahead of the expectation.
In Latin America, $SHW opened 23 new stores in 4Q16, but opened only three in 1Q17. The company said it is currently facing some issues in that region related to timing and the market. On new store openings for 2017, the company expects it to be lower than 2016 openings, which was 47.
$SHW elected Michael Thaman to its BoD at the company's annual meeting of shareholders on April 19, 2017. Thaman was appointed to the Compensation and Management Development Committee of the Board. He is also a member of the BoD of Kohler Company, a private manufacturing company.
$SHW expects 2Q17 net sales to increase a mid to high single digit percentage, and EPS of $4.15-4.35. For 2017, the company predicts sales growth in mid single digit percentage and EPS of $13.65-13.85. The EPS guidance for both the periods included costs associated with the expected acquisition of Valspar.
$SHW reported a rise in 1Q17 earnings driven by reduction in income tax provision as well as higher paint sales volume in Paint Stores Group and change in revenue classification. Net income rose to $239.15MM or $2.53 per share from $164.88MM or $1.75 per share last year. Sales grew to $2.76Bil from $2.57Bil.