10-KPeriod: FY2004

SHERWIN WILLIAMS CO Annual Report, Year Ended Dec 31, 2004

Filed March 10, 2005For Securities:SHW

Summary

Sherwin-Williams Company's 2004 Form 10-K highlights a robust year characterized by strategic acquisitions and continued expansion. The company reported net sales of $6.114 billion, a significant increase driven by organic growth and the successful integration of Duron, Inc. and Paint Sundry Brands Corporation. Income before cumulative accounting changes rose to $393 million, demonstrating strong operational performance across its diverse segments, which include Paint Stores, Consumer, Automotive Finishes, and International Coatings. Key to the company's strategy appears to be the aggressive expansion of its retail footprint, particularly through the Paint Stores segment, which added 67 net new stores and acquired 229 locations in 2004. This focus on accessibility and direct customer engagement, combined with a strong brand portfolio, positions Sherwin-Williams favorably within the competitive coatings industry. The company also noted its preparedness for seasonal sales fluctuations and its ability to manage raw material sourcing effectively.

Key Highlights

  • 1The company achieved net sales of $6.114 billion in 2004, with income before cumulative accounting changes at $393 million.
  • 2Sherwin-Williams successfully integrated two key acquisitions in 2004: Duron, Inc. (September 1) and Paint Sundry Brands Corporation (August 31).
  • 3The Paint Stores segment saw significant expansion, adding 67 net new stores and acquiring 229 additional locations in 2004, bringing the total to 2,983 company-operated stores.
  • 4The company's diverse business segments include Paint Stores, Consumer, Automotive Finishes, and International Coatings, each contributing to overall performance.
  • 5Sales for the Paint Stores, Consumer, and Automotive Finishes segments are traditionally weighted towards the second and third quarters, with the company managing inventory through the first quarter to meet demand.
  • 6Sherwin-Williams maintains a strong brand portfolio, with key trademarks like Sherwin-Williams®, Thompson’s® WaterSeal®, Dutch Boy®, and Krylon® across its various segments.
  • 7The company has a share repurchase program in place, repurchasing 1,450,000 shares in the fourth quarter of 2004 under its publicly announced program.

Frequently Asked Questions

In 2004, Sherwin-Williams focused on strategic acquisitions, notably Duron, Inc. and Paint Sundry Brands Corporation, and continued expansion of its retail network, particularly through its Paint Stores segment. The company also aimed to leverage its strong brand portfolio and expand its market presence in North and South America.

These acquisitions were integrated into the Paint Stores and Consumer segments, respectively, and contributed to the company's sales growth. The filing indicates these integrations were successful and part of the company's overall expansion strategy.

Sherwin-Williams acknowledges significant competition across all its segments from local, regional, national, and international players. The company emphasizes product quality, service, price, innovation, and distribution as key competitive factors and positions itself as a leading manufacturer and retailer in the coatings industry.

The company typically builds its inventories during the first quarter to meet increased demand in the second and third quarters, which are traditionally its strongest sales periods for the Paint Stores, Consumer, and Automotive Finishes segments. Working capital is managed through short-term borrowings and lines of credit.