PR Newswire | Sep 29, 2020 04:05PM EDT

Sales and Diluted Net Income Per Share Guidance

09/29 15:05 CDT

Sherwin-Williams Increases Third Quarter 2020 Sales Guidance and Full Year 2020 Sales and Diluted Net Income Per Share Guidance- Increasing third quarter 2020 consolidated net sales guidance to be up three-to-five percent over third quarter 2019, compared to our previous guidance of up or down by a low-single-digit percentage- Increasing full year 2020 diluted net income per share guidance to be in the range of $20.96 to $21.46 per share compared to our previous guidance of $19.21 to $20.71 per share. Diluted net income per share guidance includes an estimated $2.54 per share for acquisition-related amortization expense CLEVELAND, Sept. 29, 2020

CLEVELAND, Sept. 29, 2020 /PRNewswire/ -- The Sherwin-Williams Company (NYSE: SHW) today increased its net sales guidance for the third quarter 2020 and its net sales and diluted net income per share guidance for the full year 2020.

The Company now expects third quarter 2020 consolidated net sales to increase three-to-five percent compared to third quarter 2019. The Company's prior guidance, issued July 28, 2020, was for third quarter 2020 consolidated net sales to be up or down a low-single-digit percentage compared to third quarter 2019. On a segment basis, The Americas Group (TAG) third quarter net sales are expected to be up a low-single-digit percentage compared to our previous guidance of flat to up a low-single-digit percentage. The Consumer Brands Group (CBG) third quarter net sales are expected to be up a low-twenties percentage compared to our previous guidance of up a low-double-digit percentage. The Performance Coatings Group (PCG) third quarter net sales are expected to be flat to down a low-single-digit percentage compared to our previous guidance of down a low-to-mid-single-digit percentage.

For full year 2020, the Company now expects consolidated net sales to be flat to up slightly compared to full year 2019. The Company's prior guidance, issued July 28, 2020, was for full year 2020 consolidated net sales to be approximately flat year-over-year. On a segment basis, TAG full year net sales are expected to be flat to up a low-single-digit percentage. CBG full year net sales are expected to be up a low-double-digit to mid-teen percentage. PCG full year net sales are expected to be down a low-to-mid-single-digit percentage.

Based on sales at these levels, the Company is increasing its full year 2020 diluted net income per share guidance to be in the range of $20.96 to $21.46 per share. This compares to the Company's prior guidance of $19.21 to $20.71 per share issued July 28, 2020. Full year 2020 diluted net income per share guidance includes acquisition-related amortization expense of approximately $2.54 per share. Full year 2019 earnings per share was $16.49 and included acquisition-related costs of $3.21 per share and other adjustments of $1.42 per share.

Commenting on the Company's updated third quarter and full year 2020 guidance, John G. Morikis, Chairman and Chief Executive Officer, said, "Demand for architectural coatings has been stronger than expected in the third quarter, led by our DIY, residential repaint and new residential segments. Demand on the industrial side of our business has also improved, led by continued strength in packaging and emerging momentum in other segments, most notably in automotive refinish and industrial wood. As a result, our sales expectations for the third quarter and full year 2020 have improved. We now expect our full year 2020 adjusted diluted net income per share to increase 12.5% at the midpoint of the range compared to the prior year. In addition to improving demand, credit for the improved outlook goes to the dedicated employees of Sherwin-Williams who have remained focused on winning new business, serving our customers and delivering solutions through these on-going, challenging conditions."

The Company is scheduled to release third quarter 2020 financial results on October 27, 2020, at which time it will provide its outlook on fourth quarter sales and further details regarding full year guidance.

About Sherwin-WilliamsFounded in 1866, The Sherwin-Williams Company is a global leader in the manufacture, development, distribution, and sale of paints, coatings and related products to professional, industrial, commercial, and retail customers. Sherwin-Williams manufactures products under well-known brands such as Sherwin-Williams(r), Valspar(r), HGTV HOME(r) by Sherwin-Williams, Dutch Boy(r), Krylon(r), Minwax(r), Thompson's(r) Water Seal(r), Cabot(r) and many more. With global headquarters in Cleveland, Ohio, Sherwin- Williams(r) branded products are sold exclusively through a chain of more than 4,900 company-operated stores and facilities, while the company's other brands are sold through leading mass merchandisers, home centers, independent paint dealers, hardware stores, automotive retailers, and industrial distributors. The Sherwin-Williams Performance Coatings Group supplies a broad range of highly-engineered solutions for the construction, industrial, packaging and transportation markets in more than 120 countries around the world. Sherwin-Williams shares are traded on the New York Stock Exchange (symbol: SHW). For more information, visit www.sherwin.com.

Cautionary Statement Regarding Forward-Looking InformationThis press release contains certain "forward-looking statements," as defined under U.S. federal securities laws, with respect to sales and other matters. These statements can be identified by the use of forward-looking terminology such as "believe," "expect," "may," "will," "should," "project," "could," "plan," "goal," "potential," "seek," "intend" or "anticipate" or the negative thereof or comparable terminology. These forward-looking statements are based upon management's current expectations, estimates, assumptions and beliefs concerning future events and conditions. Readers are cautioned not to place undue reliance on any forward-looking statements. Forward-looking statements are necessarily subject to risks, uncertainties and other factors, many of which are outside the control of the Company that could cause actual results to differ materially from such statements and from the Company's historical results and experience. These risks, uncertainties and other factors include such things as: finalization of our financial statements for the quarter ended September 30, 2020; general business and economic conditions; the Company's ability to successfully integrate past and future acquisitions into its existing operations, as well as the performance of the businesses acquired; strengths of retail and manufacturing economies and the growth in the coatings industry; changes in the Company's relationships with customers and suppliers; changes in raw material availability and pricing; adverse weather conditions or impacts of climate change, natural disasters and public health crises, including the COVID-19 pandemic; the duration, severity and scope of the COVID-19 pandemic and the actions implemented by international, federal, state and local public health and governmental authorities to contain and combat the outbreak and spread of COVID-19, which may exacerbate one or more of the aforementioned and/or other risks, uncertainties and factors more fully described in the Company's reports filed with the Securities and Exchange Commission (SEC); and other risks, uncertainties and factors described from time to time in the Company's reports filed with the SEC. Since it is not possible to predict or identify all of the risks, uncertainties and other factors that may affect future results, the above list should not be considered a complete list. Any forward-looking statement speaks only as of the date on which such statement is made, and the Company undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Investor Relations Contacts:Jim JayeSenior Vice President, Investor Relations & Corporate Communications Direct: 216.515.8682james.r.jaye@sherwin.com

Eric SwansonVice President, Investor Relations Direct: 216.566.2766eric.r.swanson@sherwin.com

Media Contact:Julie YoungVice President, Global Corporate Communications Direct: 216.515.8849corporatemedia@sherwin.com

Regulation G Reconciliations

Management of the Company believes that investors' understanding of the Company's operating performance is enhanced by the disclosure of diluted net income per share excluding certain Valspar acquisition-related costs and other adjustments. This adjusted earnings per share measurement is not in accordance with U.S. generally accepted accounting principles (GAAP). It should not be considered a substitute for earnings per share computed in accordance with U.S. GAAP and may not be comparable to similarly titled measures reported by other companies. The following tables reconcile diluted net income per share computed in accordance with U.S. GAAP to adjusted diluted net income per share.

Current Guidance^(1)Prior Guidance^(2) (After-tax) (After-tax)



Year Ended Year Ended Year Ended December 31, 2020 December 31, 2020 December 31, 2019

Low High Low High After-Tax ^(3)

Diluted net income $20.96 $21.46 $ 19.21$ 20.71$ 16.49 per share

Trademark 1.00 impairment

Brazil indirect tax (.36) credit

California litigation expense (.28) provision reduction

Tax credit .79 investment loss

Pension plan .27 settlement expense

Total other - - - - 1.42 adjustments

Integration costs .69 (4)

Acquisition-related amortization 2.54 2.54 2.54 2.54 2.52 expense (5)

Total acquisition-related 2.54 2.54 2.54 2.54 3.21 costs

Adjusted diluted net income per $23.50 $24.00 $ 21.75$ 23.25$ 21.12 share

(1) Provided September 29, 2020

(2) Provided July 28, 2020

The Regulation G reconciliations for the year ended December 31, 2019 were(3) disclosed in the Company's Current Report on Form 8-K filed with the SEC on January 30, 2020.

Integration costs consist primarily of professional service expenses, salaries and other employee-related expenses dedicated directly to the(4) integration effort, and severance expense. These costs are included in Selling, general and administrative and other expenses and Cost of goods sold.

Acquisition-related amortization expense consists primarily of the(5) amortization of intangible assets related to the Valspar acquisition and is included in Amortization.

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SOURCE The Sherwin-Williams Company