Table of Contents
- 25 -
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DOLLARS IN THOUSANDS, EXCEPT
PER SHARE AMOUNTS
Debt and Capital Resources
Our debt classified as current was $356,204 at January 30, 2015
compared to $606,356 and $540,162 at October 31, 2014 and January 24,
2014, respectively. Total debt was $1,706,285 at January 30, 2015 compared
to $1,556,391 and $1,552,516 at October 31, 2014 and January 24,
2014, respectively. The increase in total debt from October 31, 2014 was
primarily due to share repurchases, capital expenditures and normal seasonality
of operating cash flow. The ratio of total debt to capital was 63.9% at
January 30, 2015, compared to 60.6% at October 31, 2014 and 58.8% at January 24,
2014.
On January 21,
2015, we issued $250,000 of unsecured Senior Notes that mature on February 1,
2025 with a coupon rate of 3.30%, and $250,000 of unsecured Senior Notes that
mature on February 1, 2045 with a coupon rate of 4.40%. The net proceeds of
both issuances were $491,955 in the aggregate. The public offering was made
pursuant to a registration statement filed with the U.S. Securities and
Exchange Commission. We used the net proceeds to repay short-term borrowings
under our commercial paper program and credit facility in the first quarter of
2015.
We maintain an
unsecured revolving credit facility with a syndicate of banks. On December 16,
2013, we entered into an amended and restated $750,000 credit facility with a
syndicate of banks with a maturity date of December 14, 2018. Under certain
circumstances we have the option to increase this credit facility to
$1,000,000.
We maintain uncommitted bank lines of credit to meet short-term funding
needs in certain of our international locations. These arrangements are
reviewed periodically for renewal and modification.
Our credit facilities have covenants that require us to maintain
certain financial ratios. We were in compliance with these covenants as of
January 30, 2015. Our debt covenants do not limit, nor are they reasonably
likely to limit, our ability to obtain additional debt or equity financing.
We had $191,766 in cash and cash equivalents and $596,018 in unused
committed bank credit facilities, providing total committed liquidity of
$787,784 at the end of our 2015 first quarter, compared to $389,327 at the end
of fiscal year 2014. Our cash and cash equivalent balances consist of high
quality, short-term money market instruments and cash held by our international
subsidiaries. Cash and cash equivalents held by our international subsidiaries
are used to fund their day-to-day operating needs and have also been used to
finance acquisitions. Our investment policy on excess cash is to preserve
principal. As of January 30, 2015, $189,255 of the $191,766 of cash (on
the Condensed Consolidated Balance Sheets) was held by our international
subsidiaries. If these funds were repatriated to the U.S. we would be required
to accrue and pay income taxes. However, no deferred U.S. income taxes have
been provided on these earnings as they are considered to be reinvested for an
indefinite period of time or will be repatriated when it is tax effective to do
so.
We believe future cash flow from operations, existing lines of credit,
access to credit facilities and access to debt and capital markets will be
sufficient to meet our domestic and international liquidity needs. In the
current market conditions, we have demonstrated continued access to capital
markets.
We use derivative instruments with a number of counterparties
principally to manage interest rate and foreign currency exchange risks. We
evaluate the financial stability of each counterparty and spread the risk among
several financial institutions to limit our exposure. We will continue to
monitor counterparty risk on an ongoing basis. We do not have any credit-risk
related contingent features in our derivative contracts as of January 30,
2015.
Share Repurchases
Weighted-average common shares outstanding – diluted for the first
quarter of 2015 were 83,866,879, down 3,774,425 from the same period in the
prior year. During the quarter, we repurchased 982,500 shares for $83,582. On
November 21, 2014, the Board approved a new share repurchase program, with no
expiration date, authorizing us to purchase up to $1,500,000 of outstanding
shares of common stock. This new program was effective immediately and replaced
the previous repurchase authorization. As of January 30, 2015,
$1,432,603 remained available for purchases under the new authorization.
Table of Contents
- 26 -
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DOLLARS IN THOUSANDS, EXCEPT
PER SHARE AMOUNTS
NON-GAAP FINANCIAL MEASURES
This section includes financial information prepared in accordance with
accounting principles generally accepted in the United States (GAAP), as well
as certain non-GAAP financial measures such as adjusted gross profit, adjusted
operating expense, adjusted earnings before interest and taxes (EBIT), adjusted
net income and adjusted net income per common share – diluted. Generally, a
non-GAAP financial measure is a numerical measure of financial performance that
excludes (or includes) amounts that are included in (or excluded from) the most
directly comparable measure calculated and presented in accordance with GAAP.
The non-GAAP financial measures should be viewed as a supplement to, and not a
substitute for, financial measures presented in accordance with GAAP. Non-GAAP
measures as presented herein may not be comparable to similarly titled measures
used by other companies.
We believe that the non-GAAP financial measures provide meaningful
information to assist investors in understanding our financial results and
assessing prospects for future performance without regard to restructuring
charges. We believe adjusted gross profit, adjusted operating expense, adjusted
EBIT, adjusted net income and adjusted net income per common share – diluted
are important indicators of our operations because they exclude items that may
not be indicative of or are unrelated to our core operating results and provide
a baseline for analyzing trends in our underlying business. To measure adjusted
gross profit, adjusted operating expense and adjusted EBIT, we remove the
impact of before-tax restructuring charges and gain on sale of certain assets.
Adjusted net income and adjusted net income per common share – diluted are
calculated by removing the after-tax impact of restructuring charges and gain
on sale of certain assets from our calculated net income and net income per common
share – diluted. Since non-GAAP financial measures are not standardized, it may
not be possible to compare these financial measures with other companies’
non-GAAP financial measures. These non-GAAP financial measures are an
additional way to view aspects of our operations that, when viewed with our
GAAP results and the reconciliations to corresponding GAAP financial measures
below, provide a more complete understanding of our business. We strongly
encourage investors and shareholders to review our financial statements and
publicly filed reports in their entirety and not to rely on any single
financial measure.
Table of Contents
- 27 -
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DOLLARS IN THOUSANDS, EXCEPT
PER SHARE AMOUNTS
The following table reconciles gross profit, operating expense, EBIT,
net income and net income per common share – diluted (GAAP financial measures)
to adjusted gross profit, adjusted operating expense, adjusted EBIT, adjusted
net income and adjusted net income per common share – diluted (non-GAAP
financial measures) for the periods presented:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
January 30, 2015
|
|
|
January 24, 2014
|
|
|
|
|
Coatings Segment
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
before interest and taxes (EBIT)
|
|
$
|
135,609
|
|
|
$
|
69,975
|
|
|
|
|
Restructuring
charges – cost of sales
|
|
|
2,390
|
|
|
|
4,265
|
|
|
|
|
Restructuring
charges – operating expense
|
|
|
963
|
|
|
|
4,355
|
|
|
|
|
Gain on sale
of certain assets
|
|
|
(48,001
|
)
|
|
|
—
|
|
|
|
|
Adjusted
EBIT
|
|
$
|
90,961
|
|
|
$
|
78,595
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paints Segment
|
|
|
|
|
|
|
|
|
|
|
|
EBIT
|
|
$
|
25,329
|
|
|
$
|
30,997
|
|
|
|
|
Restructuring
charges – cost of sales
|
|
|
2,459
|
|
|
|
1,775
|
|
|
|
|
Restructuring
charges – operating expense
|
|
|
731
|
|
|
|
1,044
|
|
|
|
|
Adjusted
EBIT
|
|
$
|
28,519
|
|
|
$
|
33,816
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other and Administrative
|
|
|
|
|
|
|
|
|
|
|
|
EBIT
|
|
$
|
(2,617
|
)
|
|
$
|
(5,783
|
)
|
|
|
|
Restructuring
charges – cost of sales
|
|
|
—
|
|
|
|
66
|
|
|
|
|
Restructuring
charges – operating expense
|
|
|
—
|
|
|
|
301
|
|
|
|
|
Adjusted
EBIT
|
|
$
|
(2,617
|
)
|
|
$
|
(5,416
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
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|
Gross profit
|
|
$
|
333,292
|
|
|
$
|
319,053
|
|
|
|
|
Restructuring
charges – cost of sales
|
|
|
4,849
|
|
|
|
6,106
|
|
|
|
|
Adjusted
gross profit
|
|
$
|
338,141
|
|
|
$
|
325,159
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expense
|
|
$
|
223,937
|
|
|
$
|
223,493
|
|
|
|
|
Restructuring
charges – operating expense
|
|
|
(1,694
|
)
|
|
|
(5,700
|
)
|
|
|
|
Adjusted
operating expense
|
|
$
|
222,243
|
|
|
$
|
217,793
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT
|
|
$
|
158,321
|
|
|
$
|
95,189
|
|
|
|
|
Restructuring
charges – total
|
|
|
6,543
|
|
|
|
11,806
|
|
|
|
|
Gain on sale
of certain assets
|
|
|
(48,001
|
)
|
|
|
—
|
|
|
|
|
Adjusted
EBIT
|
|
$
|
116,863
|
|
|
$
|
106,995
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
103,974
|
|
|
$
|
53,553
|
|
|
|
|
After tax
restructuring charges – total1
|
|
|
4,118
|
|
|
|
7,581
|
|
|
|
|
After tax
gain on sale of certain assets1
|
|
|
(37,216
|
)
|
|
|
—
|
|
|
|
|
Adjusted net
income
|
|
$
|
70,876
|
|
|
$
|
61,134
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
per common share – diluted
|
|
$
|
1.24
|
|
|
$
|
0.61
|
|
|
|
|
Restructuring
charges – total
|
|
|
0.05
|
|
|
|
0.09
|
|
|
|
|
Gain on sale
of certain assets
|
|
|
(0.44
|
)
|
|
|
—
|
|
|
|
|
Adjusted net
income per common share – diluted
|
|
$
|
0.85
|
|
|
$
|
0.70
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 The tax effect
of the gain on sale of assets and restructuring charges is calculated using the
effective tax rate of the jurisdiction in which the charges were incurred.
See Note 15 in
Notes to Condensed Consolidated Financial Statements for further information on
restructuring.
Table of Contents
- 28 -
ITEM 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS
CRITICAL
ACCOUNTING ESTIMATES
The discussion and
analysis of our financial condition and results of operations are based upon
our Condensed Consolidated Financial Statements, which have been prepared in
accordance with generally accepted accounting principles in the United States
(GAAP). The preparation of these financial statements requires us to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, revenues and expenses, and related disclosure of any contingent
assets and liabilities at the date of the financial statements. We regularly
review our estimates and assumptions, which are based on historical experience
and on various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis for making judgments about
the carrying values of assets and liabilities that are not readily apparent
from other sources. Actual results may differ from these estimates under
different assumptions or conditions.
A comprehensive
discussion of our critical accounting estimates is included in the Management’s
Discussion and Analysis of Financial Condition and Results of Operations in our
Annual Report on Form 10-K for the year ended October 31, 2014. There were no
material changes to our critical accounting estimates in the first quarter of
fiscal year 2015.
OFF-BALANCE
SHEET ARRANGEMENTS
We do not have
off-balance sheet arrangements that have, or are reasonably likely to have, a
current or future material effect on our financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources.
FORWARD-LOOKING
STATEMENTS
Certain statements
contained in “Management’s Discussion and Analysis of Financial Condition and
Results of Operations” and elsewhere in this report constitute “forward-looking
statements” within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
The Private Securities Litigation Reform Act of 1995 provides a safe harbor for
forward-looking statements.
Forward-looking statements
are based on management’s current expectations, estimates, assumptions and
beliefs about future events, conditions and financial performance.
Forward-looking statements are subject to risks, uncertainties and other
factors, many of which are outside our control and could cause actual results
to differ materially from such statements. Any statement that is not historical
in nature is a forward-looking statement. We may identify forward-looking
statements with words and phrases such as “expects,” “projects,” “estimates,”
“anticipates,” “believes,” “could,” “may,” “will,” “plans to,” “intends,”
“should” and similar expressions.
These risks,
uncertainties and other factors include, but are not limited to, deterioration
in general economic conditions, both domestic and international, that may
adversely affect our business; fluctuations in availability and prices of raw
materials, including raw material shortages and other supply chain disruptions,
and the inability to pass along or delays in passing along raw material cost
increases to our customers; dependence of internal sales and earnings growth on
business cycles affecting our customers and growth in the domestic and
international coatings industry; market share loss to, and pricing or margin
pressure from, larger competitors with greater financial resources; significant
indebtedness that restricts the use of cash flow from operations for
acquisitions and other investments; dependence on acquisitions for growth, and
risks related to future acquisitions, including adverse changes in the results
of acquired businesses, the assumption of unforeseen liabilities and
disruptions resulting from the integration of acquisitions; risks and
uncertainties associated with operating in foreign markets, including achievement
of profitable growth in developing markets; impact of fluctuations in foreign
currency exchange rates on our financial results; loss of business with key
customers; damage to our reputation and business resulting from product claims
or recalls, litigation, customer perception and other matters; our ability to
respond to technology changes and to protect our technology; possible
interruption, failure or compromise of the information systems we use to
operate our business; changes in governmental regulation, including more
stringent environmental, health and safety regulations; our reliance on the
efforts of vendors, government agencies, utilities and other third parties to
achieve adequate compliance and avoid disruption of our business; unusual
weather conditions adversely affecting sales; changes in accounting policies
and standards and taxation requirements such as new tax laws or revised tax law
interpretations; the nature, cost and outcome of pending and future litigation
and other legal proceedings; and civil unrest and the outbreak of war and other
significant national and international events.
We undertake no
obligation to subsequently revise any forward-looking statement to reflect new
information, events or circumstances after the date of such statement, except
as required by law.
Table of Contents
- 29 -
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK
Our foreign sales and results of operations are
subject to the impact of foreign currency fluctuations. Generally our
underlying costs are denominated in the same currency as our sales. We have not used derivative financial instruments to
hedge our exposure to translation gains and losses. A 10% adverse change applied equally to all foreign currency
exchange rates is not expected to have a material effect on our net income or
financial position. A change of greater
than 10% in the exchange rates for individual currencies in geographies where
we have a significant presence could have a material impact on our net income
or financial position.
We are also subject to interest rate risk. At
January 30, 2015, approximately 12.1% of our total debt consisted of
floating rate debt. From time to time, we may enter into interest rate
derivatives to hedge a portion of either our variable or fixed rate debt.
Assuming the current level of borrowings, a 10% increase in interest rates from
those in effect at the end of the first quarter would not have a material
impact on our results of operations or financial position.
ITEM 4. CONTROLS AND PROCEDURES
Disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) are our
controls and other procedures that are designed to ensure that information
required to be disclosed by us in the reports that we file or submit under the
Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the Securities and Exchange Commission’s rules and forms.
Disclosure controls and procedures include, without limitation, controls and procedures
designed to ensure that information required to be disclosed by us in the
reports that we file or submit under the Exchange Act is accumulated and
communicated to our management, including our Chief Executive Officer and Chief
Financial Officer, as appropriate, to allow timely decisions regarding required
disclosure.
We have evaluated the
effectiveness of the design and operation of our disclosure controls and
procedures as of January 30, 2015. Based on that evaluation, the Chief
Executive Officer and Chief Financial Officer concluded that our disclosure
controls and procedures are effective.
There were no changes in
our internal control over financial reporting during the quarter ended
January 30, 2015 that have materially affected, or are reasonably likely
to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
During the period covered
by this report, there were no legal proceedings instituted that are reportable,
and there were no material developments in any of the legal proceedings that
were previously reported on our Form 10-K for the year ended October 31, 2014.
ITEM 1A. RISK FACTORS
There were no material changes to the risk factors
disclosed in our Form 10-K for the year ended October 31, 2014.
Table of Contents
- 30 -
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE
OF PROCEEDS
(a)
Not applicable
(b) Not applicable
(c) We made the following repurchases of equity
securities during the quarter ended January 30, 2015:
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period
|
|
Total
Number
of Shares
Purchased
|
|
Average
Price Paid
per Share
|
|
Total
Number of
Shares
Purchased as
Part
of Publicly
Announced
Plans or
Programs
|
|
Maximum
Number
of Shares that
May
Yet be Purchased
Under
the Plans or
Programs1
|
|
Maximum
Amount
that May Yet be
Spent Under the
Plans or Programs2
|
|
|
11/1/2014 - 11/21/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repurchase
Program
|
|
|
192,500
|
|
$
|
84.05
|
|
|
192,500
|
|
|
4,826,974
|
|
|
N/A
|
|
|
11/22/2014 - 11/28/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repurchase
Program
|
|
|
12,500
|
|
$
|
84.88
|
|
|
12,500
|
|
|
N/A
|
|
$
|
1,498,938,594
|
|
|
11/29/2014 - 12/26/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repurchase
Program
|
|
|
217,500
|
|
$
|
83.09
|
|
|
217,500
|
|
|
N/A
|
|
$
|
1,480,860,692
|
|
|
12/27/2014 - 1/30/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repurchase
Program
|
|
|
560,000
|
|
$
|
86.15
|
|
|
560,000
|
|
|
N/A
|
|
$
|
1,432,602,691
|
|
|
Other
Transactions3
|
|
|
54,772
|
|
$
|
83.87
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
1
|
On
December 5, 2012, the board approved a share repurchase authorization of
15,000,000 shares, with no predetermined end date. There were 192,500 shares
purchased in fiscal year 2015 and 4,826,974 shares remaining under that plan
on November 21, 2014 when it was replaced by a new plan.
|
|
|
|
|
2
|
On
November 21, 2014 the board authorized the purchase of up to $1.5 billion of
the corporation’s outstanding shares of common stock, with no expiration
date. This new program was effective
immediately and replaced the previous repurchase authorization. On January 30, 2015, there were 790,000
shares purchased under this program.
|
|
|
|
|
3
|
Our other transactions
include our acquisition of common stock in satisfaction of tax-payment
obligations upon vesting of restricted stock.
|
Table of Contents
- 31 -
ITEM 6. EXHIBITS
|
|
|
|
|
Exhibit
|
|
|
|
Number
|
|
Description
|
|
|
|
|
|
4.1
|
|
Fifth Supplemental
Indenture, among the Company, The Bank of New York Mellon Trust Company, N.A.
(as successor to Bank One Trust Company, N.A.) and U.S. Bank National
Association, as series trustee, dates as of January 21, 2015, to Indenture
dated as of April 24, 2002, between the Company and the Bank of New York
Mellon Trust Company, N.A. (as successor to Bank One Trust Company, N.A.)
(incorporated by reference to Form 8-K filed on January 21, 2015)
|
|
|
|
|
|
31.1 *
|
|
Section 302 Certification of the Chief Executive
Officer
|
|
|
|
|
|
31.2 *
|
|
Section 302 Certification of the Chief Financial
Officer
|
|
|
|
|
|
32.1 *
|
|
Certification of Chief
Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. §1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
101.INS *
|
|
XBRL Instance Document
|
|
|
|
|
|
101.SCH *
|
|
XBRL Schema Document
|
|
|
|
|
|
101.CAL *
|
|
XBRL Calculation Linkbase Document
|
|
|
|
|
|
101.DEF *
|
|
XBRL Definition Linkbase Document
|
|
|
|
|
|
101.LAB *
|
|
XBRL Label Linkbase Document
|
|
|
|
|
|
101.PRE *
|
|
XBRL Presentation Linkbase Document
|
* Filed electronically herewith
Table of Contents
- 32 -
SIGNATURES
Pursuant to the
requirements of the Securities and Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
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THE VALSPAR CORPORATION
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Date: March 11, 2015
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By
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/s/ Rolf Engh
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Rolf Engh
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Executive Vice President, General Counsel and
Secretary
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Date: March 11, 2015
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By
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/s/ James L. Muehlbauer
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James L. Muehlbauer
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Executive Vice President, Chief Financial and
Administrative Officer
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Exhibit 31.1
SECTION 302 CERTIFICATION
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I, Gary E. Hendrickson, certify that:
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1.
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I have
reviewed this quarterly report on Form 10-Q of The Valspar Corporation;
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2.
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Based on my
knowledge, this report does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements made,
in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
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3.
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Based on my
knowledge, the financial statements, and other financial information included
in this report, fairly present in all material respects the financial
condition, results of operations and cash flows of the registrant as of, and
for, the periods presented in this report;
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4.
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The registrant’s
other certifying officer(s) and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant
and have:
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(a)
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Designed
such disclosure controls and procedures, or caused such disclosure controls
and procedures to be designed under our supervision, to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;
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(b)
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Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles;
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(c)
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Evaluated
the effectiveness of the registrant’s disclosure controls and procedures and
presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by
this report based on such evaluation; and
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(d)
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Disclosed in
this report any change in the registrant’s internal control over financial
reporting that occurred during the registrant’s most recent fiscal quarter
(the registrant’s fourth fiscal quarter in the case of an annual report) that
has materially affected, or is reasonably likely to materially affect, the
registrant’s internal control over financial reporting; and
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5.
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The
registrant’s other certifying officer(s) and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to the
registrant’s auditors and the audit committee of the registrant’s board of
directors (or persons performing the equivalent functions):
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(a)
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All
significant deficiencies and material weaknesses in the design or operation
of internal control over financial reporting which are reasonably likely to
adversely affect the registrant’s ability to record, process, summarize and
report financial information; and
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(b)
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Any fraud,
whether or not material, that involves management or other employees who have
a significant role in the registrant’s internal control over financial
reporting.
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Date: March
11, 2015
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/s/ Gary E. Hendrickson
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Gary E. Hendrickson
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Chairman and Chief Executive Officer
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Exhibit 31.2
SECTION 302 CERTIFICATION
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I, James L.
Muehlbauer, certify that:
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1.
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I have
reviewed this quarterly report on Form 10-Q of The Valspar Corporation;
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2.
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Based on my
knowledge, this report does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements made,
in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
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3.
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Based on my
knowledge, the financial statements, and other financial information included
in this report, fairly present in all material respects the financial
condition, results of operations and cash flows of the registrant as of, and
for, the periods presented in this report;
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4.
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The registrant’s
other certifying officer(s) and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant
and have:
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a.
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(a) Designed
such disclosure controls and procedures, or caused such disclosure controls
and procedures to be designed under our supervision, to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;
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b.
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(b) Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles;
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c.
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(c)
Evaluated the effectiveness of the registrant’s disclosure controls and
procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and
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d.
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(d)
Disclosed in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent fiscal
quarter (the registrant’s fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially
affect, the registrant’s internal control over financial reporting; and
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5.
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The
registrant’s other certifying officer(s) and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to the
registrant’s auditors and the audit committee of the registrant’s board of
directors (or persons performing the equivalent functions):
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a.
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(a) All
significant deficiencies and material weaknesses in the design or operation
of internal control over financial reporting which are reasonably likely to
adversely affect the registrant’s ability to record, process, summarize and
report financial information; and
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b.
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(b) Any
fraud, whether or not material, that involves management or other employees
who have a significant role in the registrant’s internal control over
financial reporting.
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Date: March
11, 2015
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/s/ James L. Muehlbauer
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James L. Muehlbauer
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Executive Vice President, Chief Financial
and
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Administrative Officer
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Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. §1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of The Valspar Corporation (the
“Company”) on Form 10-Q for the quarter ended January 30, 2015 as filed with
the Securities and Exchange Commission on the date hereof (the “Report”), I,
Gary E. Hendrickson, Chief Executive Officer of the Company and I, James L.
Muehlbauer, Chief Financial Officer of the Company, certify, pursuant to 18
U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, that:
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1.
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The Report
fully complies with the requirements of Section 13(a) or 15(d) of the
Securities Act of 1934; and
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2.
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The
information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.
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/s/ Gary E. Hendrickson
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Gary E. Hendrickson
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Chairman and Chief Executive Officer
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March 11, 2015
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/s/ James L. Muehlbauer
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James L. Muehlbauer
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Executive Vice President, Chief Financial
and
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Administrative Officer
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March 11, 2015
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