In 1994, Richard Rompala joined Valspar as its President , a year later he became the CEO followed by Chairman in 1998. From 1996-97 Valspar completed the acquisition of Coating Unit of TOTAL S. A whose operations were spread through Europe and Central Asia. In 1998 the company acquired Anzol Pty. Ltd. a subsidiary of Dexter Corporation, Anzol Pty. Ltd. was a maker of packaging and industrial coatings and had a strong prescence in Europe with revenues of $ 208 million in1997 in Europe alone. Valspar’s consumer business also got a boost in 1998 with the acquistion of Plasti-Kote Co. Inc.
which was a consumer aerosol and speciality paint manufacturer in both UK and Scandinivia. In Feb 2000, Angus Wurtele resigned from the Board after 30 glorious years of service , leaving a legacy of vision and dedication. Post millenium acquisitons continued as well as opening of new facilities, Valspar conitnues to grow globally. In 2002, 25% of sales were made of sales outside US. Sales of all product lines also further increased in 2003 and as a result of continued focus on safety standards and its improvements Valspar was placed in the elite class of safest manufacturers in US.
In 2004, Valspar achieved record revenues of $2. 5 Billion. Rich Rompala retired from Valspar after 10 years of service. Bill Mansfield succeeded him in 2005 as President and Chief Executive. Revenue has seen a little increase prior to last year similarly Cost of sales have also increased a little bit indicating overall increase in business activity but said that Gross Profit hasn’t increased. Operating expenses have also increased but only to a little extent however Depreciation has increased considerably resulting in Operaing income to fall in 2008 besides increased business activity.
Interest expense reduced in 2008 however other expenses have been incurred this year which was an income figure last year. Income tax also saw a reduction in this year. Net income reduced this year. Current assets have increased only slightly this year as a result of reduction in inventory levels which is a wise move because inventroy levels should be kept to a minimum and an increase in other current assets which is intended to improve overall liquidity. Similarly long-term assets have seen a little increase this year besides reduction in property, plant and equipment and other long-term assets but intangible assets have increased.
Current liabilities have been considerably reduced. On the whole assets and liabilities have been somewhat the same as last year. Gross profit margin is almost same as the industry average although it should had been better keeping in mind its huge reputation and access to markets worldwide. Net profit margin is below industry average which indicates that Valspar hasn’t been able to manage operating expenses with the increase in business activity resulting in a decrease in profits instead.
Similarly Return on Equity and Return on Assets are also below industry average which shows that Valspar is giving below average return on its investments. Liquidity for Valspar is below the industry norm and is an area of concern because deteriorating liquidity can ruin a business even if it is making profits. For argument sake though Current ratio is considerably below industry besides Quick ratio which is a little below industry average. Although Valspar is not highly geared but for any future borrowings things are not very favourable either.
Interest cover for Valspar is much below industry average said that it seems enough to cover current commitments but doesn’t encourage additional financing. Debt/Equity and Leverage ratio on the other hand are almost the same as industry averages. Talking of efficiency Valspar has performed better than industry for instance Inventory turnover is much greater than industry average which shows that Valspar is keeping optimum levels of inventory. Similarly Asset turnover is slightly better than industry norm but Receivables turnover is below industry average whic indicates that Valspar should lower levels of receivables.