Summary
Sherwin-Williams reported a 3.3% increase in net sales for the third quarter of 2008, reaching $2.27 billion, and a 2.1% increase for the first nine months, totaling $6.28 billion. This growth was primarily driven by recent acquisitions and favorable foreign currency translation rates. However, diluted net income per common share saw a decline, decreasing by 3.2% for the quarter to $1.50 and by 8.0% for the nine-month period to $3.57. The company experienced a decrease in gross profit margin due to rising raw material costs, lower domestic production volumes, and pricing pressures, though selling, general, and administrative expenses as a percentage of sales remained relatively stable or improved slightly. The company is actively monitoring risks associated with the current economic environment, including collectibility of receivables, asset fair value, and liquidity, though no material impact has been observed yet. The company also completed the acquisition of liquid coatings subsidiaries of Inchem Holdings International Limited and Becker Powder Coatings, Inc. during the year, further expanding its global reach and product portfolio. Significant legal proceedings, particularly related to lead pigment and lead-based paint litigation, continue to be a notable risk factor, although recent court decisions in Rhode Island have been favorable. Environmental-related liabilities remain a considerable area of focus, with ongoing investigations and remediation efforts. Despite the challenging economic backdrop, Sherwin-Williams continues to return capital to shareholders through share repurchases and dividends. The company's liquidity appears adequate, supported by operating cash flows and available credit facilities. Investors should remain mindful of the ongoing litigation and environmental remediation costs, as well as the impact of economic conditions on future sales volumes and profitability.
Financial Highlights
45 data points| Revenue | $2.27B |
| Cost of Revenue | $1.31B |
| Gross Profit | $960.49M |
| SG&A Expenses | $681.35M |
| Net Income | $177.08M |
| EPS (Basic) | $0.51 |
| EPS (Diluted) | $0.50 |
| Shares Outstanding (Basic) | 347.49B |
| Shares Outstanding (Diluted) | 354.55B |
Key Highlights
- 1Consolidated net sales increased by 3.3% in Q3 2008 and 2.1% year-to-date, primarily driven by acquisitions and favorable foreign currency translation.
- 2Diluted net income per common share decreased by 3.2% in Q3 2008 to $1.50 and by 8.0% year-to-date to $3.57.
- 3Gross profit margin decreased due to rising raw material costs, lower domestic production volumes, and pricing pressures.
- 4The company completed two significant acquisitions in 2008: liquid coatings subsidiaries of Inchem Holdings International Limited and Becker Powder Coatings, Inc.
- 5Sherwin-Williams is actively monitoring economic risks related to receivables, asset fair value, and liquidity, noting no material impact thus far.
- 6The company recorded a $23.9 million impairment charge for certain trademarks and goodwill in the first nine months of 2008.
- 7Ongoing legal proceedings, particularly lead pigment and lead-based paint litigation, remain a significant area of disclosure and potential risk.