10-KPeriod: FY2001

SHERWIN WILLIAMS CO Annual Report, Year Ended Dec 31, 2001

Filed March 14, 2002For Securities:SHW

Summary

The Sherwin-Williams Company's 2001 10-K filing provides an overview of its diverse operations across five reportable segments: Paint Stores, Consumer, Automotive Finishes, International Coatings, and Administrative. The company emphasizes its strong market position, extensive brand portfolio, and expanding retail footprint, particularly within the Paint Stores segment, which saw net new store additions throughout the year. Despite a slight dip in net sales compared to 2000, the company's financial performance in 2001 was significantly impacted by a substantial impairment charge on long-lived assets, leading to a reported net income of $263 million, a notable increase from the prior year's adjusted figure. Investors should note the company's strategic focus on growth through both organic expansion and potential acquisitions, alongside its efforts in managing market risks such as interest rate and foreign currency fluctuations. The company highlights its commitment to research and development, environmental compliance, and maintaining strong customer relationships across its various segments. While facing competition, Sherwin-Williams asserts its leading position and competitive advantages in product quality, service, and innovation. The company's financial health appears robust, with a significant market capitalization and a well-established network of manufacturing and distribution facilities.

Key Highlights

  • 1The company operates through five distinct reportable segments: Paint Stores, Consumer, Automotive Finishes, International Coatings, and Administrative.
  • 2In 2001, Sherwin-Williams reported net sales of $5,066 million, a slight decrease from $5,212 million in 2000.
  • 3A significant event in 2001 was an impairment charge of $294 million ($1.80 per share) on long-lived assets, which heavily influenced net income and financial position.
  • 4Despite the impairment charge, reported net income for 2001 was $263 million, a substantial recovery from the adjusted net income of $16 million in 2000.
  • 5The Paint Stores Segment continued its expansion, with 85 net new stores opened or acquired in 2001, adding to its extensive network across North America.
  • 6Sherwin-Williams actively manages market risks, including interest rate and foreign currency exposure, utilizing derivative instruments for hedging purposes.
  • 7The company possesses a strong portfolio of well-recognized trademarks and trade names across all its operating segments.

Frequently Asked Questions

The company recorded a significant impairment charge of $294 million ($1.80 per share) on long-lived assets in 2001. This charge negatively impacted net income for the year, although reported net income still showed a substantial increase compared to the prior year due to this charge being the primary driver of the prior year's low net income figure.

Sherwin-Williams is pursuing growth through a combination of strategies, including organic expansion, as evidenced by the opening of 85 net new stores in the Paint Stores segment in 2001, and potentially through acquisitions. The company also licenses its technology and trademarks globally, particularly within the Automotive Finishes and International Coatings segments.

The company organizes its business into five reportable segments: Paint Stores (retail paint stores), Consumer (manufactures and distributes paint for third parties), Automotive Finishes (automotive paints and coatings), International Coatings (global paint and coatings sales), and Administrative (corporate overhead and leasing activities).

Yes, Sherwin-Williams operates in highly competitive markets across all its segments. Competitors range from other paint and wallpaper stores, mass merchandisers, home centers, and independent retailers to other domestic and international coatings manufacturers. Key competitive factors include product quality, price, service, innovation, and distribution.