The Valspar Corporation has reported fiscal fourth quarter 2014 net sales of $1.2 billion, an increase of 11 percent over the prior year. Reported net income and earnings per diluted share for the current year include nonrecurring items, which are detailed in the “Reconciliation of Non-GAAP Financial Measures” included in this release. Fourth quarter 2014 adjusted net income and earnings per diluted share, excluding these nonrecurring items, were $117 million and $1.38, respectively. Fourth quarter 2013 adjusted net income and earnings per diluted share were $86 million and $0.97 respectively. Fiscal year 2014 net sales were $4.5 billion, up 10% versus the prior year. Fiscal year 2014 adjusted net income and earnings per diluted share, excluding nonrecurring items, were $374 million and $4.35, respectively. Fiscal year 2013 adjusted net income and earnings per diluted share were $320 million and $3.54, respectively.

“We are pleased to report record sales and earnings in 2014,” said Gary E. Hendrickson, chairman and chief executive officer. “Sales increased 10 percent, and diluted EPS (as adjusted) increased 23 percent during the year. This strong performance was driven by volume growth in the Coatings segment; continuing benefits from our new growth initiatives in Paints; excellent performance from our international regions; benefits from new product introductions; and the positive impact of productivity initiatives. In addition, we continued to demonstrate our commitment to enhancing shareholder returns by increasing our dividend by 13% and repurchasing 5% of our outstanding shares during the year.”

“During the fourth quarter, sales grew 11 percent and adjusted EPS increased 42 percent.” Hendrickson added. “The Coatings segment continued its positive momentum with sales growth of 15 percent and all product lines delivered volume increases in the quarter. We realized the highest growth in the General Industrial product line, which benefited from the impact of the Inver acquisition. We continued to grow our Packaging product line, driven by the success of our non-BPA offerings. In the Paints segment, sales increased in all regions and we significantly increased EBIT.”

Commenting on the company’s outlook Hendrickson said, “Looking ahead to 2015, we expect another year of growth. In our Coatings segment, we expect stable end markets and growth from new business wins. In the Paints segment, continued growth in China, Australia and Europe is expected, to be offset by an adjustment to our product line offering at a customer in North America. We estimate that total sales will increase low single-digits in fiscal 2015. We expect adjusted annual EPS will be in the range of $4.45 to $4.65.”

Net sales in the Coatings segment increased 15 percent to $694 million in the fiscal fourth quarter of 2014. Excluding acquisitions, sales in the segment increased 11 percent, and volumes were up high single-digits. Sales growth in the Coatings segment was led by Packaging, General Industrial (excluding acquisitions) and Coil. Coatings segment adjusted earnings before interest and taxes (EBIT) of $117 million (or 16.9% of net sales) increased 25 percent as a result of acquisitions, increased volume, improved sales mix and productivity initiatives.

Net sales in the Paints segment increased 7 percent to $479 million in the fiscal fourth quarter of 2014, and volume increased high single-digits. Sales grew (in local currency) in all regions in the Paints segment. Paints segment adjusted EBIT of $70 million (or 14.6% of net sales) was up 41 percent from the prior year primarily due to increased volume, favorable mix and productivity initiatives.

During the quarter, the company paid a quarterly dividend of $0.26 per common share outstanding, or $21.5 million ($1.04 per share or $87.4 million for full year fiscal 2014). Valspar is a member of the S&P High Yield Dividend Aristocrats®, which is comprised of companies increasing dividends every year for at least 20 consecutive years. Also during the quarter, the company repurchased 1.2 million shares, for $91 million (4.7 million shares and $349 million for full year fiscal 2014).

Annual fiscal 2015 sales guidance is for growth in the low single-digits. Fiscal 2015 annual diluted EPS (as adjusted) guidance is $4.45 to $4.65. Included in the company’s guidance, among other operating factors, are three items that are expected to reduce sales and diluted EPS (as adjusted) growth in fiscal 2015: (1) negative impact of foreign currency translation; (2) increased interest expense from anticipated debt issuance; and (3) the lack of a 53rd week in fiscal 2015 (53 weeks in fiscal 2014 versus 52 weeks in fiscal 2015). The combined impact of these three factors is expected to lower sales growth by approximately 4 percentage points and reduce EPS (as adjusted) by approximately $0.24 in fiscal 2015.