The Sherwin-Williams Company Reports 2012 Year-end Financial Results

     The Sherwin-Williams Company Reports 2012 Year-end Financial Results

PR Newswire

CLEVELAND, Jan. 31, 2013

CLEVELAND, Jan.31, 2013 /PRNewswire/ --

  oConsolidated net sales for the year increased 8.8% to a record $9.53
    billion
  oDiluted net income per common share increased to a record $6.49 per share
    in twelve months 2012 compared to $4.14 per share last year
  oEarnings before interest, taxes, depreciation and amortization increased
    $244.4 million in the year to a record $1.21 billion
  oNet operating cash increased $152.1 million to a record $887.9 million
  oAnticipates diluted earnings per share for 2013 in the range of $7.45 to
    $7.55 per share

The Sherwin-Williams Company (NYSE: SHW) announced its financial results for
the year and fourth quarter ended December31, 2012. Compared to the same
periods in 2011, consolidated net sales increased $768.8 million, or 8.8%, to
$9.53 billion in the year and increased $151.4 million, or 7.3%, to $2.22
billion in the quarter due primarily to higher paint sales volume in our Paint
Stores Group and selling price increases. Acquisitions increased consolidated
net sales approximately 0.9% in the year and in the quarter. Unfavorable
currency translation rate changes decreased consolidated net sales 1.8% in the
year and 1.0% in the quarter.

Diluted net income per common share in the year increased to $6.49 per share,
including asset impairment charges of $.02 per share, from $4.14 per share in
2011, including asset impairment charges of $.03 per share and an increase in
income tax expense of $.70 per share relating to the IRS settlement.
Unfavorable currency translation rate changes decreased diluted net income per
common share by $.13 per share for the year. Acquisitions had no impact on
diluted net income per common share for the year. Diluted net income per
common share was $1.12 per share in the quarter compared to $.14 per share a
year ago, including the asset impairment charges and the IRS settlement noted
above for the fourth quarter 2012 and 2011. Acquisitions and currency
translation rate changes had an unfavorable impact on fourth quarter diluted
net income per common share resulting in a reduction of $.03 per share.

Net sales in the Paint Stores Group increased 13.2% to $5.41 billion in the
year and increased 9.8% to $1.25 billion in the quarter due primarily to
higher paint sales volume across all end market segments as well as higher
year over year selling prices. Net sales from stores open for more than twelve
calendar months increased 12.5% in the year and 9.2% in the quarter over last
year's comparable periods. Paint Stores Group segment profit increased to
$861.8 million in the year from $645.7 million last year and increased to
$181.5 million in the quarter from $133.4 million last year. The increases in
segment profit in the year and quarter were due primarily to higher paint
sales volume and higher selling prices partially offset by increases in raw
material costs and in selling, general, and administrative expenses. Segment
profit as a percent to net sales increased in the year to 15.9% from 13.5% in
2011 and increased in the quarter to 14.6% from 11.8% last year. Trademark
impairment charges for the planned conversion of various acquired brands were
$3.4 million in the year and fourth quarter 2012 compared to $4.7 million in
the year and fourth quarter 2011.

Net sales of the Consumer Group increased 3.7% to $1.32 billion in the year
due primarily to selling price increases and acquisitions. Net sales
increased 1.4% to $255.8 million in the quarter due primarily to acquisitions
partially offset by lower volume sales to most of the Group's retail
customers. Acquisitions increased net sales 3.2% and 6.5% in the year and
quarter, respectively. Segment profit increased to $216.4 million in the year
from $173.7 million last year due primarily to selling price increases and
improved operating efficiencies partially offset by increases in raw material
costs. Segment profit decreased to $23.3 million in the quarter from $30.2
million last year due primarily to a more normal seasonal decline in our
internal finished goods inventory compared to the fourth quarter 2011 and
increases in raw material costs that were partially offset by selling price
increases. As a percent to net external sales, segment profit increased in the
year to 16.4% from 13.6% in 2011 and decreased in the quarter to 9.1% from
12.0% last year.

The Global Finishes Group's net sales stated in U.S. dollars increased 4.4% to
$1.96 billion in the year due primarily to selling price increases, higher
paint sales volume, and acquisitions partially offset by unfavorable currency
translation rate changes. In the quarter, the Global Finishes Group's net
sales increased 5.1% to $487.1 million due primarily to selling price
increases and higher paint sales volume partially offset by unfavorable
currency translation rate changes. In the year, acquisitions increased net
sales in U.S. dollars by 1.8%. Unfavorable currency translation rate changes
decreased net sales 3.5% and 1.4% in the year and quarter, respectively.
Stated in U.S. dollars, segment profit in the year increased to $147.2 million
from $90.3 million last year and increased in the quarter to $34.1 million
from $13.0 million last year due primarily to selling price increases,
increased paint sales volume, and good expense control partially offset by
increases in raw material costs. Unfavorable foreign currency translation rate
changes and acquisitions decreased segment profit $11.9 million in the year
and $3.4 million in the quarter. As a percent to net external sales, segment
profit was 7.5% in twelve months 2012 compared to 4.8% in 2011 and 7.0% in the
quarter versus 2.8% last year. Trademark impairment charges were $0.7 million
in the year and fourth quarter 2012 compared to $0.8 million in the year and
fourth quarter 2011.

The Latin America Coatings Group's net sales stated in U.S. dollars increased
0.9% to $836.1 million in the year and increased 5.2% to $231.5 million in the
quarter due primarily to selling price increases and higher paint sales volume
partially offset by unfavorable currency translation rate changes. Unfavorable
currency translation rate changes decreased net sales by 10.2% and 6.7% in the
year and quarter, respectively. Stated in U.S. dollars, segment profit in the
year increased to $81.2 million compared to $75.5 million last year and
increased to $30.1 million in the quarter from $26.4 million last year due
primarily to selling price increases and increased paint sales volume
partially offset by increases in raw materials costs and unfavorable foreign
currency translation rate changes. Foreign currency translation rate changes
reduced segment profit $9.7 million in the year and decreased segment profit
$2.0 million in the quarter. As a percent to net external sales, segment
profit was 9.7% in twelve months compared to 9.1% in 2011 and 13.0% in the
quarter versus 12.0% in the fourth quarter last year.

The Company acquired 0.8 million shares of its common stock through open
market purchases in the quarter bringing our total purchased to 4.60 million
shares in the year. The Company had remaining authorization at December31,
2012 to purchase 16.45 million shares.

Commenting on the financial results, Christopher M. Connor, Chairman and Chief
Executive Officer, said, "We are pleased to report record highs for multiple
financial measures in 2012, including sales, earnings per share, net operating
cash and earnings before interest, taxes, depreciation and amortization. All
of our operating segments contributed to the record year with increases in
sales and operating profit, lead by our Paint Stores Group."

"Over the past year, our Paint Stores Group had positive sales volume across
all end market segments and drove strong operating results. Our Consumer Group
improved operating results through operating efficiencies and selling price
increases. The Global Finishes Group continued improving segment profit as a
percent to sales through increased selling prices and efficiencies gained from
the continued integration of prior year acquisitions. Our Latin America
Coatings Group managed to improve their operating results despite the
unfavorable effects of currency and the softening of demand in their end
markets.

"We continue to generate significant cash from operations allowing us to
invest in the business and return a substantial portion to our shareholders.
In 2012, we generated net operating cash flow of $887.9 million. Our working
capital ratio (accounts receivable plus inventories less accounts payable to
sales), excluding acquisitions, at December 31, 2012 was 10.7% compared to
10.9% last year. We are continuing to invest in our business by expanding the
Paint Stores platform. In 2012, we added 70 net new stores, finishing the year
with 3,520 stores in operation. During the year, we continued to buy our stock
on the open market and paid an annual cash dividend of $1.56 per common share.
Our balance sheet is positioned well for the anticipated closing of the Comex
acquisition and other investments in our business enabling us to borrow
approximately $1.0 billion in debt in the fourth quarter at an average blended
rate of 2.1%.

"In the first quarter of 2013, we anticipate our consolidated net sales will
increase a low single digit percentage compared to the first quarter of 2012.
At that anticipated sales level, we estimate diluted net income per common
share in the first quarter of 2013 will be in the range of $1.03 to $1.13 per
share compared to $.95 per share earned in the first quarter of 2012. For the
full year 2013, we expect consolidated net sales to increase above 2012 levels
by a mid single digit percentage. With annual sales at that level, we
anticipate diluted net income per common share for 2013 will be in the range
of $7.45 to $7.55 per share compared to $6.49 per share earned in 2012. These
results exclude any effect from the proposed Comex acquisition."

The Company will conduct a conference call to discuss its financial results
for the fourth quarter and year 2012, and its outlook for the first quarter
and full year 2013, at 11:00 a.m. ET on Thursday, January31, 2013. The
conference call will be webcast simultaneously in the listen only mode by
Vcall. To listen to the webcast on the Sherwin-Williams website,
www.sherwin.com, click on About Us, choose Investor Relations, then select
Press Releases and click on the webcast icon following the reference to the
January 31^st release. The webcast will also be available at Vcall's Investor
Calendar website, www.investorcalendar.com. An archived replay of the live
webcast will be available at www.sherwin.com beginning approximately two hours
after the call ends and will be available until Thursday, February 21, 2013 at
5:00 p.m. ET.

Founded in 1866, The Sherwin-Williams Company is a global leader in the
manufacture, development, distribution, and sale of coatings and related
products to professional, industrial, commercial, and retail customers. The
company manufactures products under well-known brands such as
Sherwin-Williams^®, Dutch Boy^®, Krylon^®, Minwax^®, Thompson's^® Water
Seal^®, and many more. With global headquarters in Cleveland, Ohio,
Sherwin-Williams^® branded products are sold exclusively through a chain of
more than 4,000 company-operated stores and facilities, while the company's
other brands are sold through leading mass merchandisers, home centers,
independent paint dealers, hardware stores, automotive retailers, and
industrial distributors. The Sherwin-Williams Global Finishes Group
distributes a wide range of products in more than 109 countries around the
world. For more information, visit www.sherwin.com.

This press release contains certain "forward-looking statements", as defined
under U.S. federal securities laws, with respect to sales, earnings and other
matters. These forward-looking statements are based upon management's current
expectations, estimates, assumptions and beliefs concerning future events and
conditions. Readers are cautioned not to place undue reliance on any
forward-looking statements. 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 and from the Company's historical results and experience.
These risks, uncertainties and other factors include such things as: general
business conditions, strengths of retail and manufacturing economies and the
growth in the coatings industry; changes in the Company's relationships with
customers and suppliers; changes in raw material availability and pricing;
unusual weather conditions; and other risks, uncertainties and factors
described from time to time in the Company's reports filed with the Securities
and Exchange Commission. Since it is not possible to predict or identify all
of the risks, uncertainties and other factors that may affect future results,
the above list should not be considered a complete list. Any forward-looking
statement speaks only as of the date on which such statement is made, and the
Company undertakes no obligation to update or revise any forward-looking
statement, whether as a result of new information, future events or otherwise.

Investor Relations Contact:
Bob Wells
Senior Vice President, Corporate Communications and Public Affairs
Sherwin-Williams
Direct: 216.566.2244
rjwells@sherwin.com

Media Contact:
Mike Conway
Director, Corporate Communications
Sherwin-Williams
Direct: 216.515.4393
Pager: 216.422.3751
mike.conway@sherwin.com



The Sherwin-Williams Company and Subsidiaries
Statements of Consolidated Income (Unaudited)
                   Three Months Ended December 31,   Year Ended December 31,
Thousands of
dollars, except    2012               2011           2012          2011
per share data
Net sales          $  2,221,870       $  2,070,442   $ 9,534,462   $ 8,765,699
Cost of goods sold 1,210,362          1,184,342      5,312,236     5,021,137
Gross profit       1,011,508          886,100        4,222,226     3,744,562
Percent to net     45.5%              42.8%          44.3%         42.7%
sales
Selling, general
and administrative 827,976            753,957        3,195,648     2,960,814
expenses
Percent to net     37.3%              36.4%          33.5%         33.8%
sales
Other general
(income) expense - (3,998)            657            5,248         2,731
net
Impairment of      4,086              5,492          4,086         5,492
trademarks
Interest expense   11,863             9,623          42,788        42,497
Interest and net   (953)              (1,740)        (2,913)       (3,711)
investment income
Other income - net (1,659)            (11,432)       (9,940)       (4,809)
Income before      174,193            129,543        987,309       741,548
income taxes
Income taxes *     56,978             114,991        307,112       299,688
Net income         $  117,215         $  14,552      $ 680,197     $ 441,860
Net income per
common share:
Basic              $  1.14            $  .14         $ 6.63        $ 4.22
Diluted            $  1.12            $  .14         $ 6.49        $ 4.14
Average shares
outstanding -      101,816,954        102,066,634    101,714,901   103,471,323
basic
Average shares and
equivalents        104,133,772        104,230,372    103,930,429   105,671,973
outstanding -
diluted



* Includes IRS Settlement of $74,982, or approximately $.70 per share, in the
Three months and Year ended December 31, 2011. See October 24, 2011 press
release filed on Form 8-K for more information on the IRS Settlement.

Additional information regarding the Company's financial condition, operating
segment results and other information can be found on the Sherwin-Williams
website, www.sherwin.com, by clicking on About Us, choosing Investor
Relations, then selecting Press Releases and clicking on the reference to the
January 31^st release.



SOURCE Sherwin-Williams Company

Website: http://www.sherwin.com