The Valspar Corporation ( VAL ) agreed to sell $400 million aggregate principal amount of 4.200% senior notes due January 15, 2022.
The net proceeds from this offering will be used for general corporate purposes including repayment of a portion of its commercial paper borrowings and the repayment of $200 million principal amount of 5.625% Senior Notes due May 1, 2012 at maturity.
As of October 28, 2011, long-term debt was $679.8 million, down 27.9% from $943.2 million in the prior year.
In November 2011, Valspar announced its fourth-quarter 2011 results. Earnings rose 50% to 84 cents from last year's 56 cents, exceeding the Zacks Consensus Estimate of 70 cents. Adjusted net earnings excluded a non-cash impairment charge of $3.82 per share for goodwill and intangibles associated with the company's wood coatings and gelcoat product lines and $0.13 per share restructuring charge.
Including the after-tax non-cash impairment charge of $363.4 million, the reported net loss for the fourth quarter of 2011 was $295.7 million or $3.18 per share.
Quarterly sales jumped 19.4% year over year to $1.05 billion, driven by new business efforts, pricing and productivity, offset by rising raw material costs and challenging market conditions.
We are more optimistic on Valspar's long-term performance, which is likely to be driven by volume increases in both the Paint and Coatings categories.
Valspar holds a short-term Zacks #1 Rank (Strong Buy) on the stock.
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