Sherwin-Williams Co. Q2 2009 Earnings Call Transcript

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2009-07-21 14:33:23.0

Tags: Look, Call Transcript, Earnings, Sherwin-Williams Co., Financial Planning, Financial Services, Finance, Seeking Alpha

Question-and-Answer Session

Operator

(Operator Instructions). Your first question comes from Saul Ludwig – Keybanc Capital Markets.

Saul LudwigKeybanc Capital Markets

This question is related to the consumer division in your facilities, a couple parts, how much did you incur in expenses related to closing facilities in the quarter, and I assume they would be included in the consumer group? And then excluding whatever that number is, were your fixed costs in the consumer group down and, if so, by how much?

Sean Hennessey

Saul, it's $6 million in the six months, $2.8 million in the three months and I don't think we've ever divulged what our conversion costs are.

Saul LudwigKeybanc Capital Markets

Were they lower?

Sean Hennessey

Yes. I don't think we're ready to start giving that kind of metric out.

Saul LudwigKeybanc Capital Markets

Then a question on the administrative line, Sean, your interest cost was down sharply. I guess I was a little surprised that your administrative number wasn't off more sharply than it was. I wonder if you could provide a little color on that administrative number and what we might expect, as we look out to the balance of the year

Sean Hennessey

Yes, when you sit there and take a look at the six months, Saul, we're about $17 million, $17.5 million lower; of that, interest expense is $13 million. And just the admin spending and reductions that we've taken here are almost $9 million.

So when you take a look at what it has actually cost us, it's really the first six months of an environmental and the timing of environmental. We think for the full year, environmental will be fine, but just in that first quarter and second quarter, our environmental expenses were a little higher than what we expected and that's what dampened that difference between the first and second quarter.

Going out, we think we're still going to control SG&A expenses. I think that our interest expense is – we think we're in pretty good shape. The interest rates that we're paying for short-term right now are around 60 to 65 basis points, so when you take a look at where we are with interest right now, we think we're going to have a nice year for interest expense savings.

Saul LudwigKeybanc Capital Markets

So the administrative numbers should continue to trend lower?

Sean Hennessey

 

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